Back in December 2012, Mark, a fourteen-year old millennial living in Hong Kong, poured some of the money he saved for college to Bitcoins.
Now a student in Australia, Mark is cashing in some of his Bitcoins to pay for his college education and living expenses.
Apparently, including Bitcoins in an education fund paid off for Mark.
But that was back in 2012, when Bitcoin was trading at low teens. What about now, with Bitcoin trading close to $6000? Is it a good idea for parents to pour some of the funds set aside for the education of their children in Bitcoin?
Nobody can say for sure, as guessing where the price of a highly speculative asset will be several years from now is a difficult task even for the most sophisticated forecasters.
But there are a few things that should make parents skeptical about the future of Bitcoin. One of them is timing. Bitcoin had an astronomical rise in recent months, and therefore, it’s due for another correction one that could be vicious. The digital currency has gained 32.45% in seven days only—see table.
Another thing is competition from competing cryptocurrencies, which might eventually lead to a collapse of the Bitcoin market — like the tulip market back in 1637.
|Coin||% 24H||% 7d|
**As of Saturday October 14, 2017, at 10.30 pm
Then there’s the potential for fraud somewhere in the cryptocurrency industry, which could create a Lehman Brothers’ or Madoff investment scandal, which caused the 2008-9 stock market crash.
Worse, there are the central banks and big governments that are standing by to crush Bitcoin should it gain broad acceptance and threaten their interests, as discussed in previous pieces here.