Given that cryptocurrencies like Bitcoin can see up to a 15 percent increase in value in 48 hours, it might be good advice to convert profits into something more concrete.
Rich Whitehurst, 37, of Stoke-on-Trent could have taken this advice literally.
After quadrupling an investment of around £ 240 in around 60 days during the previous Bitcoin boom in 2017, the father of two used part of the nearly £ 3,000 he made to buy a new driveway and replace his windows .
Stoke-on-Trent, 37-year-old Rich Whitehurst quadrupled his bitcoin position in the previous boom in 2017
After mining Bitcoin himself in 2016, which led to an argument with his ex-wife about the “drastically increasing cost of our electricity bills”, he stopped “because the return was not huge” and instead started to change the cryptocurrency to invest in Exchange Coinbase about a year later.
“It was £ 10 here, £ 30 there, just money I wouldn’t notice, sort of ‘let’s see what happens, I won’t miss it,” he said. “My investment has quadrupled, and my mining profit has increases. For my friends who said I was crazy, this was a win-win and a great boast. “
It paid off a few days before Bitcoin crashed from a high of just over $ 19,000 per coin in December 2017 to just $ 6,000 in February 2018, though it continues to maintain a modest stake that it plans to hold on to for the long term.
Like cryptocurrency enthusiast Chris Sedgwick, who turned £ 2,000 worth of coins into £ 75,000 and bought a Skoda Octavia in 2015, Rich has turned intangible gains into intangible gains.
In addition to his renovations, Rich, who has been selling video game consoles and electronics online since 2017, bought an Xbox One and kept part of the profits for “everyday pocket money.”
He hopes to use his cryptocurrency and other conventional investments to be mortgage-free by the age of 40.
Rich used his profits to renew his driveway and buy new windows
But while he remains bullish on Bitcoin and predicts it could hit £ 100,000 per coin by the end of next year, down from around £ 36,000 or $ 51,000 now, he has some advice for a new generation of investors who have done so bought in the latest bitcoin boom.
“I would warn that people would do what I did without investigating. I was lucky, it’s that simple,” he told This is Money.
Relatively experienced investors, or at least those who hit Bitcoin’s all-time high in 2017, are quickly drowned out by newcomers.
According to a survey by the comparison site Finder, a fifth of the British were already able to hold cryptocurrencies such as Bitcoin and Ethereum, compared to just 3 percent in 2018.
According to a recent survey by comparison site Finder, 19% of Britons could potentially own Bitcoin – that’s 15 million people. However, some analysts said the number was too high
That could mean a 558 percent increase in just three years, while a similar survey by the Financial Conduct Authority released last year again found that only 3 percent of the UK owned cryptocurrency in 2019.
It’s probably the real number somewhere in the middle of those two percentages.
Of the 19 percent of respondents who told Finder they are doing this now, a quarter bought their Bitcoin in 2020 and another fifth in the first two months of this year.
Bitcoin’s stratospheric surge last year, with its price rising to just under $ 30,000 by the end of the year and over $ 50,000 this year, was driven by larger institutional investors and interest from payment companies, but it did exist an increasing number of everyday traders on the train.
Rich made his profits during Bitcoin’s first peak in late 2017 – which has since been massively surpassed by the events of 2020
eToro and Revolut, which enable everyday UK investors to buy and sell Bitcoin, told This is Money that the number of applications and the number of customers rose sharply in December when Bitcoin hit a new high.
In the second half of last year and early 2021, Coinbase, the UK’s most popular exchange, customer service came under pressure as both old investors and newcomers flocked to the platform to trade as the cryptocurrency appreciated.
At the exchange, which wants to become a publicly traded company, sales more than doubled to 1.3 billion US dollars last year.
“eToro gained 5 million new customers worldwide in 2020. Another 2 million will be added this year to invest in crypto assets, stocks or other investors,” said Simon Peters, an analyst at eToro.
Of the 19% of people who said they own Bitcoin now, 45% have bought it in the past two years
“This surge in interest in crypto and other assets means that the direction of travel is clear – Bitcoin and cryptoassets in general are becoming more mainstream and held by more investors.”
However, he expressed doubts that up to 19 percent of the country owned cryptocurrency, even if interest had increased.
“Of the 7.8 billion people on the planet, there are only about 35 million bitcoin addresses that actually contain coins, and individuals can have more than one bitcoin address. While it is possible that a fifth of Britons could hold Bitcoin in the future, it won’t happen anytime soon. ‘
Bitcoin hit the $ 50,000 per coin mark earlier this year after an incredible run in 2020
However, the surge in trading has raised concerns among regulators and commentators that another drop in Bitcoin prices in 2018 could seriously pull everyday investors out of their pockets.
“Investing in crypto assets, or related investments and loans, generally involves very high risk with investors’ money,” the FCA warned last month. “When consumers invest in these types of products, they should be ready to lose all of their money.”
Finder’s survey found that seven out of ten respondents still had no intention of buying bitcoin. Many believed that this was still too much of a risk. Rich said this was an attitude many of his friends shared.
However, the cryptocurrency remains incredibly volatile, losing 15% of its value in 48 hours in February
“Most of my friends still don’t understand cryptocurrency so stay clear to those who still say it is still a niche and a big risk,” he said, although he added that his former brother-in-law was making some gains as well has made.
When asked if he feels he is reaching his goal of being mortgage-free due to a continued rise in the price of bitcoin by 40, Rich said, “I would like to say yes, but I think it could be very close.
“If Bitcoin and my investments keep increasing, it’s a definite possibility, but with the coronavirus and undoubtedly massive financial changes from the Chancellor in the future, it’s everyone’s guess.”
“I’m getting closer and closer to paying off the mortgage, but I have saved the date I will withdraw everything regardless of the amount my mortgage expired at, and I will pay off any amount.”
Questions and Answers: The pros and cons of BITCOIN
WHAT IS BITCOIN?
You will often hear it described as cryptocurrency, which is not very illuminating. In simple terms, it’s virtual money with no physical bills or coins. It was invented by someone who claims to be Satoshi Nakamoto and who is Japanese, but his real identity is unknown. In its early days, it was often used for illegal activities, but Bitcoin has become attractive to ordinary investors.
HOW DOES IT WORK?
Bitcoins are stored in a digital wallet on smartphones or computers. Transactions are recorded on blockchain, the huge online ledger behind the currency. In theory, you can use Bitcoin to pay for goods and services, although they are not widely accepted. Or you can buy it in the hopes of making a profit.
WHERE CAN YOU BUY IT?
Anyone with access to a computer or smartphone can buy Bitcoin through an exchange. You have to pay trading fees in addition to the cost of the bitcoin itself.
WHAT’S IT WORTH?
Bitcoin is not backed by a tangible asset or an underlying commodity such as gold, so it has no intrinsic value. It’s “worth” what people are willing to pay – and that was extremely volatile. As of March last year, a bitcoin was worth around $ 5,000. After a spectacular rally around Christmas, it exceeded $ 41,000 in the first week of January. It’s at $ 38,000.
SHOULD I BUY?
It depends on whether you believe Bitcoin will increase in value. It’s a big risk. The FCA’s City Watchdog recently reminded savers that they should be ready to lose all of the money they put in Bitcoin. So only invest cash that you can afford to lose. When things go wrong, Bitcoin trading is largely outside the safety nets of regulators.
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