Haven’t Invested In Cryptocurrency Yet? Don’t Worry, You’re Still Very Early To The Party

Is it too late to invest in cryptocurrency?

It’s a question I get all the time. Yesterday, for instance, one came via email from Chaz.

Chaz is an old friend. Trained as a software engineer, he’s very tech savvy.

He’s already invested in a couple of cryptocurrencies.Now he’s torn. The problem isn’t that his cryptocurrencies haven’t done well. Just the opposite. He told me…

I think maybe I should quit while I’m ahead. There’s so much excitement around cryptocurrencies, and I want to buy more. But the prices have gone up so much.

Chaz is right about one thing. Crypto is on a tear.

Since the beginning of the year, its market cap (which includes all virtual currencies) shot up past $160 billion.

At the beginning of the year? Believe it or not, it was less than $20 billion.

Unless you’re talking about cold fusion, no asset group deserves to go up that fast.

What’s true about the stock market is also true about cryptocurrency. The market either undershoots or overshoots. It’s almost an accident when the market gets it right.

Usually, one doesn’t flee a bull market unless something terrible has happened.

I think a couple of things are making people nervous.

For one, a lot of money is being thrown at cryptocurrencies. It’s starting to feel surreal.

But if you believe – as I do – that cryptocurrencies are on the road to producing a series of distinctive (as in different use cases) transformative technologies based on the blockchain, then you also must believe that this is no passing fad.

When you invest in a stock, you believe that the future value of the company will be higher than it is today. Amazon has 179.5 price-to-earnings ratio.

That’s at least three to four times more than I’d spend on a fast-growth company.

Are investors leaning a bit too far ahead of their skis? Probably.

Has it worked out for them? It sure has. In the past 10 years, investors are up 924%.