Trending Now :

The US Housing Market Is Booming. Is a Crash Ahead? Financial Literacy: How to Be Smart with Your Money Non-Fungible Token (NFT):EXPLAINED SKYROCKETED CEO PAY & LONG LINES AT FOOD BANKS Amazon Workers Want to Unionize Another Major City Piloted Universal Basic Income The New Bubble: SPACs SUBMIT YOUR PPP ROUND 2 APPLICATION BEFORE MARCH 31ST Robinhood-GameStop Hearing & Payment for Order Flow Guess Who’s Coming to Main Street Democratic Senators Say No to $15 Minimum Wage BEZOS OUT! President Biden Most Impressive Act Went Unnoticed: CFPB Biden $1.9 Trillion Stimulus Package 2021 IPO DRAFT CLASS: Ranking the Top 10 Prospects $25 Billion Emergency Rental Assistance NO, TESLA IS NOT WORTH MORE THAN TOYOTA, VOLKSWAGEN, HYUNDAI, GM, AND FORD PUT TOGETHER AMAZON TO HAND OUT ITS WORKERS $300 HOLIDAY BONUS Where Does the American Middle-class stand on Student Debt Relief? Joe Biden’s Economic Plan Explained 4 TYPES OF BAD CREDIT REPORTS AND HOW TO FIX THEM What Is the Proper Approach to Not Buy Too Much House? FISCAL STIMULUS PLANS STILL IN ACTION How to Pick Investments for Your 401(k) 10 Simple Ways to Manage Your Money Better All You Need to Know about Reverse Mortgage All You Need to Know about Wholesale Real Estate Credit card Teaser Rates AVERAGE CREDIT CARD INTEREST RATE SURGES TO 20.5 Percent Trump Signs 4 Executive Orders for Coronavirus Economic Relief The Worst American Economy in History WHY CREDIT CARDS MINIMUM PAYMENTS ARE SO LOW? 10 BIGGEST COMPANIES IN AMERICA AND WHO OWNS THEM White House Wants to End the Extra $600-A-Week Unemployment  10 Countries That Penalize Savers FEWER CREDIT CARD BALANCE-TRANSFER OFFERS ARE IN YOUR MAILBOX Private Payrolls and the Unemployment Rate SHOULD YOU BUY INTO THE HOUSING MARKET RESILIENCY? WILL WE GET A SECOND STIMULUS CHECK The Child Tax Credit and Earned Income Tax Credit THE RETURN OF BUSINESS CYCLES Should You Request a Participant Loan or an Early 401(k) Withdrawal? Homebuyers Should Not Worry about Strict Mortgage Borrowing Standards The Potential Unintended Consequences of Mortgage Forbearance All Business Owners Need to Know about the Paycheck Protection Program 10 MILLION UNEMPLOYMENT CLAIMS IN TWO WEEKS HOW WILL THE GLOBAL MIDDLE-CLASS RECOVER FROM A SECOND ECONOMIC RECESSION IN A DECADE? WILL U.S. CONSUMERS CONTINUE TO SPEND? HOW’S YOUR 401(k) PRESIDENT TRUMP SIGNS $2.2 TRILLION CORONAVIRUS STIMULUS BILL MIDDLE-CLASS NIGHTMARE: MORE THAN 3.3 AMERICAN FILED FOR UNEMPLOYMENT CLAIMS IN THE US LAST WEEK. LAWMAKERS AGREED ON $2 TRILLION CORONAVIRUS STIMULUS DEAL CORONAVIRUS STIMULUS PACKAGE FAILED AGAIN IN THE SENATE APRIL 15 (TAX DAY) DELAYED DEMOCRATS AND REPUBLICANS DIFFER ON HOW $2 TRILLION OF YOUR TAX MONEY SHOULD BE SPENT YOU CAN DELAY MORTGAGE PAYMENTS UP TO 1 YEAR, BUT SHOULD YOU? 110 Million American Consumers Could See Their Credit Scores Change The Middle-Class Needs to Support Elizabeth Warren’s Bankruptcy Plan The SECURE Act & Stretch IRA: 5 Key Retirement Changes 5 Best Blue-chip Dividend Stocks for 2020 9 Common Bankruptcy Myths 401(K) BLUNDERS TO AVOID Government Policies Built and Destroyed America’s Middle-Class & JCPenney Elijah E. Cummings, Esteemed Democrat Who Led the Impeachment Inquiry into Trump, Dies at 68 12 Candidates One-stage: Who Championed Middle-Class Policies the Most WeWork: From Roadshow to Bankruptcy Stand with the United Auto Workers Formal impeachment Inquiry into President Donald Trump America Is Still a Middle-Class Country SAUDI OIL ATTACKS: All YOU NEED TO KNOW THE FEDERAL RESERVE ABOLISHED BUSINESS CYCLES AUTO WORKERS GO ON STRIKE Saudi Attacks Send Oil Prices Spiraling REMEMBERING 9/11 What to Expect from the 116th Congress after Their August Recess Should You Accept the Pain of Trump’s Trade War? 45th G7 Summit-President Macron Leads Summit No More Upper-Class Tax Cuts Mr. President! APPLE CARD IS HERE-SHOULD YOU APPLY? THE GIG ECONOMY CREATES A PERMANENT UNDERCLASS 5 REASONS IT’S SO HARD FOR LOW-INCOME INDIVIDUALS TO MOVE UP TO THE MIDDLE CLASS ARE YOU PART OF THE MIDDLE CLASS? USE THIS CALCULATOR TO FIND OUT? WELLS FARGO IS A DANGER TO THE MIDDLE CLASS The Financialization of Everything Is Killing the Middle Class
BITCOIN AND SMART MONEY
Business

BITCOIN AND SMART MONEY

Bitcoin and Smart Money is not a pure moronic title, but the middle-income earners have to stop being the last ones on the investing bandwagon.  The Bitcoin fever has proven Wall Street right once again. Retail investors, often middle-income America, always buy financial products when they reach bubble-like prices and sell them at a bearish level. Wall Street even coined a term for it “dumb money.”

The cryptocurrency Bitcoin, a digital and decentralized currency without a central bank, was launched in 2009.  According to Yahoo Finance, its value was 5 cents on January 30, 2010. For every Bitcoin, you would receive $0.05.  You could only use it on the Dark Web (collection of websites that exist on an encrypted network and cannot be found by using traditional search engines or visited by using regular browsers) where few people knew of its existence.  By April 30, 2013, you could trade one Bitcoin for $139.23

Irrational Exuberance

By 2017, cryptocurrencies, especially Bitcoin, became household names. Your barber, attorney, financial advisor (why your” fiduciary” financial advisor recommended Bitcoin is a topic for another post) were telling you about it.  Matter of fact, by December 1, 2017, one Bitcoin was traded for as high as $19,870.62. As of this writing, it is trading around $10, 883.26.

During the Bitcoin mayhem, the American middle-class refinanced their house, borrowed on credit, and even cashed out their retirement accounts to get into the action.  However, most of them were obliterated by extreme volatility and manipulation. The volatility was so violent in some trading days that Bitcoin would trade at $15,000 around 11:00 a.m. then drop to $7,000 by lunchtime.  The middle class who did not know how to manage such extreme volatility would buy high, sometimes extremely high, and sell low.

The local media were filled with distressing stories about people losing their homes because they mortgaged their house to invest in bitcoin; many of them filed for bankruptcy because of massive credit card debts, and few claimed that they would have to stay in the workforce a few years longer because their retirement savings vanished.

One of the best ways retail investors, aka middle-income Americans, can start smartening their money is to buy financial products they understand.  If purchasing financial products that you underhand is one of Warren Buffet’s fervent investment principles, it has to be America’s middle class’ principle as well. If that principle works for one of America’s richest men, it can work for the rest of us.

BACK TO TOP
Author

Editorial Fellow for Contributors and Partnerships.

Continue Reading
Click to comment

Leave Comment

Advertisement
American Middle Class / May 22, 2021

What to Make of America’s Inflation Spike?

Since the late 1920’s when statistics began to be officially compiled, the US inflation rate...

American Middle Class / May 09, 2021

How to Use Credit Cards Wisely

Lenders want you to be creditworthy before they can finance that house, car, or new...

American Middle Class / May 02, 2021

Time to Start Paying Back the Covid-19 Hardship Withdrawal

Covid-19 hardship withdrawal was made possible by the Coronavirus Aid, Relief, and Economic Security (CARES)...