Celsius Offered Up to 18% Interest – Which Turned Out Too Good to Be True
Well, the first thing we're talking about is crypto, and I know what you're thinking. Isn't this a sign of a market top? I mean, look what's going on with crypto this week. Crypto has crashed yet again. It's been in the midst of a crash for the last nine months. It fell 50%. And then this past week alone, crypto is down 20%. You see, the traditional way, the way that most folks treat Bitcoin, Ethereum and other digital assets is you buy it because you think the price is going to go up. But there's no income, right? There's no dividend. There's no rental income because there's not real estate, there's no dividend, it's not a stock. So along came a couple of companies, a whole bunch of them now that offer to earn interest on your Bitcoin. Celsius was offering as much as 18% in interest. Well, now the company says it might be insolvent and this has caused Bitcoin and Ethereum to crash. You've got to watch out about what you're doing and how you're doing it if you're trying to get rich quick.
Don’t Fall for a Get-Rich-Quick Scheme in Crypto – or Anything
There's a difference between investing in an emerging new technology that has massive opportunity for global commerce on a massive scale and trying to make a quick buck. It's one thing to invest in something as risky and speculative and aggressive as Bitcoin, and it's quite another to take that risk and pile on by placing it with an online site that offers to provide you a massive amount of yield, 18% interest rates. You've got to ask yourself the question why would somebody be offering 18%? Why would somebody be willing to pay 18% in interest when today's interest rates are low single digit? And that's the whole point. So if you're trying to understand crypto, this makes my book The Truth About Crypto more important than ever because yes, I do have a chapter on yield in the book to help you understand how people are generating yield, the risks associated with it, to help you identify whether this is something you should or should not be engaging in. In the meantime, Bitcoin is down dramatically from just one week ago. As far as I'm concerned, that is a huge buying opportunity. We are in a midst of a mess here in the United States economy as well as that globally. And it's not just crypto that is falling sharply in value. We've seen it happen in the stock market, the bond market, soon to be happening in the real estate market as well.
Taking a Long-Term Perspective While Coping with Short-Term Volatility
This is the nature of a global recession, dealing with all the headwinds that you know all too well, rising inflation and interest rates coming, increases in tax rates, still low employment rates, the supply chain problems, the issues with COVID lingering and of course, dominating the headlines, the war with Russia and Ukraine. This means it's a very difficult environment. You need to be investing with a long-term perspective, short-term volatility like we're experiencing this past week in crypto and the stock market overall. It's going to be with us for months to come, probably well into next year.
If you're a long-term investor, it's a buying opportunity if you're a short-term profit seeker. Well, all I can say is however you behave, you'll end up getting what you deserve. But just to illustrate that today's volatility is not having any adverse impact on the long-term development and expansion of the technology, take a look at what American Express just announced. They've just announced this week a brand new American Express credit card offered in conjunction with Abra, a crypto company. When you use this new credit card, you get rewards back not in cash, but in Bitcoin and Ethereum. Mastercard's already been doing this, and in fact, MasterCard now lets you buy NFTs with its credit and debit cards.