Bitcoin Shows its True Color -- And it Isn't Exactly Green

Bitcoin values are plunging amid political controversy and reported hacker attacks, reminding serious investors to put their nest eggs elsewhere.

Feb 14, 2014 at 2:00PM

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For a while there, it looked like Bitcoin had settled down, grown up, stabilized. The cryptocurrency hovered between $900 and $1,000 per virtual coin for months, which is a radical change from the hyper-volatility of the previous three months.

But in February, Bitcoin took a turn for the worse. In a firestorm of controversy, Bitcoin's trading volumes have skyrocketed -- and valuation plummeted.

Bitcoin trading dipped as low as $302 per coin this morning. That's a 33% value plunge in one morning, starting from a closing price of $451 on Feb. 13. And it came on a truly epic wave of high trading volumes. Bitcoin has also gotten a 54% haircut in five days and a 67% decimation over the last two weeks.

Here's what it looks like:

Bitcoin Chart

Source: Bitcoin Charts.

To put this extreme volatility into perspective, the Dow Jones Industrial Average (DJINDICES:^DJI) has lost 2.5% of its value over the same period you see in the chart above. At worst, it was a 6% drop. And that's enough to make my fellow Fools wonder if high volatility isn't back in vogue.

^DJI Chart

^DJI data by YCharts.

So it's all relative. The one obvious takeaway here is that Bitcoin clearly isn't ripe for serious investing yet.

Sure, the digital currency gained a staggering 5,900% in 2013, so it's easy to get carried away by the promise of another massive surge.

But anything that can lose two-thirds of its value in two weeks is profoundly unsuitable for real investing. You can gamble, you can play around with Bitcoin, but don't call it "investing." And for goodness' sake, if you insist on dabbling in this newfangled payment vehicle, only use money you could afford to live without.

Bitcoin may still have its chance as an everyday replacement for coins, bills, and credit cards. But that's a long way away, and is by no means a guaranteed conclusion to this saga. Even if digital currencies do become a mainstream standard, Bitcoin itself could very well go under before then and be replaced by some even newer-fangled version of the same concept.

That said, I wouldn't complain if you wanted to buy me a coffee in Bitcoin. By the time I find a coffee shop that accepts Bitcoin as payment, that donation might either get me a tray full of lattes -- or nothing at all.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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