Scott Pape, also known as the Barefoot Investor, issues some words of caution to those looking to jump onto the crypto rollercoaster.
The surges in the price of cryptocurrencies has minted new millionaires, provoked declarations of a bubble, and left many of us kicking ourselves for not getting in.
Bitcoin has seen gains of over 80% at the time of writing, but bitcoin's surge has been left in the dust by dogecoin.
Year to date, dogecoin is up —brace yourself—2,613%.
Dogecoin was invented by an Aussie, Jackson Palmer, and his mate, back in 2013 as a piss-take to take a stab at all the scammy cryptocurrencies being launched at the time. Back then a single dogecoin was only worth $0.00023.
But as they say – every dog has its day and dogecoin's price rallied in 2021, spurred on by the likes of Elon Musk and other influential figures spruiking the cryptocurrency on social media.
Amid the booming market Scott Pape, also known as the Barefoot Investor, issued some words of caution to those looking to jump onto the crypto rollercoaster.
'Life is really hard when you believe you can make a quick buck from magical dog memes,' he wrote in a recent newsletter.
'It’s stressful being a gambler. There is no skill involved, and the odds are stacked against you.'
'You see, in order to make real money you have to sell. And every man and his dog is planning to sell out of dogecoin right at the top. Every single one of them.
'It’s called the ‘greater fool theory’ (i.e. you only win when some greater fool buys in at a higher price), and history is littered with people who abruptly discovered that they in fact were the fool.'
His final words of wisdom – stick to a broad-based index fund, which is proven to be the most reliable way to grow your money over time.
'If you’re persuaded to sell your boring index funds and lay down with dogs, I can almost guarantee you’ll eventually end up with financial fleas,' he said.