Bitcoin Millionaire Advises Not to Buy Bitcoin

Grant Sabatier argues that most people are not relying on the value of the technology, but are following the crowd, making Bitcoin a gamble.

Grant Sabatier is the founder of Millennial Money, a blog that offers advice on personal finance, side hustles, and investing. He has been financially independent since he was 30 and has become a Bitcoin millionaire as the cryptocurrency's price has hit record highs this year. On CNBC, Sabatier shares why people shouldn't buy Bitcoin right now.

In 2013, I invested $5,000 in Bitcoin, which was worth $72. Now, I have nearly 69.2 coins.

I first heard about Bitcoin in 2011. But it was only later, after watching a documentary, that I decided to read the cryptocurrency forums and decided to buy it. You can easily see how it will change the entire financial system.

My decision was to invest for the long term. I invested almost 1% of my assets in Bitcoin. Of course I wanted to make money from it. But since it was a small amount, if I lost it all, my life wouldn’t be that bad.

Grant Sabatier became a millionaire at the age of 30.

Bitcoin is currently worth nearly $17,000. That means my Bitcoin holdings are worth over $1.1 million. It took me five years of hard work to earn over $1 million through savings and investing in the stock market. But with Bitcoin, I earned that much this year. It’s hands-down the easiest way to make money I’ve ever done.

But I don't recommend you invest in Bitcoin now.

On my personal blog, I have received over 100 emails from readers asking about investing in Bitcoin and other cryptocurrencies. One person even told me that he poured his entire life savings into Bitcoin, buying it at $11,000. Crazy.

I also got an email from a 22 year old who had $5,000 and asked if he should invest his first dollar in Bitcoin. That was also a crazy idea.

I will tell you why.

1. It is impossible to truly value Bitcoin

Bitcoin is all the rage around the world. Even my barber, who doesn’t know what blockchain is, is buying Bitcoin. Because so many people are buying it, and so fast, you can’t really gauge its value.

Anything that moves 20-30% a day is obviously unstable. You can lose all your money very quickly. Especially if you need the money in the next year, don't buy Bitcoin. With such high volatility in the short term, Bitcoin is a gamble, not an investment.

Bitcoin virtual currency.

2. Bitcoin may have no value

The value behind Bitcoin is the blockchain technology, which can be easily copied by other cryptocurrencies. Many of the cryptocurrencies that have come after it have better systems and are easier to use.

Litecoin is one example. Bitcoin, of course, has the first-mover advantage. But it was created to buy and sell online anonymously. Now, no one can do that anymore, with prices skyrocketing. And transaction costs are skyrocketing.

The high volume of transactions also caused problems with the exchange systems. Some exchanges had to give 10 days notice to complete the transaction.

Most people don't rely on the value of technology, but follow the crowd. This is gambling, not investing.

3. Bitcoin is not safe

You might think that digital wallets are safe. But exchanges and wallets still get hacked all the time. Over $70 million worth of Bitcoin was hacked on NiceHash last week.

Even big exchanges like Coinbase can still get hacked. Since there is no agency that guarantees your Bitcoins, if you lose them, it will be very difficult to get them back.

If you decide to buy Bitcoin, I encourage you to do so responsibly. Don’t spend more than 1% of your assets, and be honest with yourself, Bitcoin is a gamble, not an investment. It’s extremely risky and there are much better options out there, both short-term and long-term.

According to VNE