KEARNEY, Neb. — People are investing more and more in the three trillion-dollar industry of digital currencies. The value of a dollar today will change over time, but with crypto, things are different.
“It’s decentralized, meaning there’s really no one overseeing it, and it’s created by the people who are mining it,” said Financial Advisor Eli Mardock. “The value for bitcoin is basically what people think at the moment.”
Mardock went to University of Nebraska- Lincoln. He said he has gained financial knowledge thanks to owning a small business.
Mardock explained cryptocurrencies are digital currencies created by computers that mine crypto tokens. There are several types of cryptocurrencies. The most popular ones include: Bitcoin, Ethereum, XRP, Dogecoin (DOGE). Once they’re “mined,” cryptocurrencies can be bought, sold and sometimes even used as money, which means that like any other currency it’s a type of investment.
Mardock said Bitcoin and other cryptocurrencies are mostly unregulated, and many governments are concerned about taxes and their lack of control over the currencies.
“I advise most of my clients to approach it very cautiously,” Mardock said.
Cryptocurrencies’ value are constantly changing.
“Do not invest money that you are not willing to lose, cryptocurrencies are still very volatile,” said Senior Software Development Engineer Arik Jones, who has been investing in cryptocurrencies for two years.
“I think it is a lot easier to get into than stocks, and there’s just a lot of interesting things happening on a cryptospace,” Jones added.
Mardock said cryptocurrencies are often considered risky investments because of their instability, as unexpected changes can lead to sharp and sudden moves in price.
“I advise my clients to keep their cryptocurrency investments completely separate from their core-dollars like retirement funds or everything that we really need,” Mardock added. “There are so much risks with crypto, I do think there could be opportunities for incredible returns, but there might also be potential to lose everything,”
Just last year Bitcoin, the most famous cryptocurrency, saw its value fluctuate between under $29,000 per bitcoin to over $67,000. There were some cases when the value fluctuated 12 to more than 15% in a single day.
A bubble is a term used a lot in the crypto world. Mardock explains a bubble is when a particular asset is traded at a price that greatly exceeds its fundamental value. But determining the fundamental value of any cryptocurrency is difficult.
“Because it’s hard to anchor cryptocurrencies to a particular actual value, you’re going to see a lot of bubbles as people invest because they see it going up, and then bursts as people get nervous that maybe it’s not worth what it’s valued at,” Mardock said.
Investing involves risk, whether it’s cryptocurrency, the stock market or even bonds.
“You need to know how much risk you’re comfortable with before you invest,” Mardock said. “By understanding your risk tolerance, you can try to avoid situations where your emotions take over.”
Helium is one of many types of cryptocurrency. Many people in Nebraska are purchasing devices called “helium hotspots” to mine helium tokens to make passive income.
“I think we’ll see that stuff really increase, especially with inflation and other things happening, anyone is going to jump to make a little extra income,” Mardock said.
The helium hotspot allows hosts to earn cryptocurrency by connecting to “The People’s Network” which is the network everyone with the device is part of. The hotspot host earns Helium based on how much they contribute to the network.
Helium Hotspot prices are in the $400+ range.
Currently, people in the U.S. cannot just go to any retailer and use cryptocurrencies to pay. But countries like El Salvador have already adopted the Bitcoin cryptocurrency as their country’s official currency.
“Crypto is part of our lives and is not really going anywhere,” Mardock said.
