Should You Invest in Bitcoin?

Mike Lomas with The Financial Guys Breaks Down Bitcoin

Mike Baggerman
January 19, 2018 - 3:00 am

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BUFFALO, N.Y. (WBEN) - Just a few years ago, the popular cryptocurrency Bitcoin was just a few dollars per coin on the market. Entering Friday, one piece of the internet currency is worth approximately $11,880.

However, Mike Lomas from The Financial Guys explained why you shouldn't jump into the craze.

"At $10,000 a share, it's drawing tons of attention by regulators," he said. "They're trying to figure out 'How do we get our arms around it? How do we police it? Where do we go next?' The other thing is, as you're investing, stocks go up because other people are willing to buy the stock from you at a higher price. At some point, you run out of buyers."

The popular cryptocurrency was created as an alternative in case the banking systems didn't work, according to Lomas. Its ease of trading online was also a perk of the business. However, it's also been used by hackers who have breached small businesses, seeking bitcoin in a ransom.

Lomas said investing is bitcoin is more like "gambling" than "investing".

"I would put my attention on some really good stocks," he added. "Long term stocks that have good earning potential. A good product. Good management. Build a foundation before I go gambling on any of that stuff."

Lomas did acknowledge that he doesn't see cryptocurrency going away any time soon. By taking a step back, he explained that it's not a bad idea to watch how it all unfolds before diving into the cryptocurrency world.

"We had this web-craze, this technology craze in the late-1990's," Lomas explained. "We saw companies like Pets.com go from 50 cents a share to $100 a share. Then it was going to go to $1,000 a share. At the end of that reckoning, it didn't go away. There were just some real players that ended up making real money on the market. I think that's what's going to happen here."

LISTEN: Bitcoin Breakdown with Mike Lomas from The Financial Guys

 

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