Martin Lewis strongly warns against crypto investments, calling them high-risk gambles, and frequently cautions that ads featuring him to promote Bitcoin are scams. He does not recommend cryptocurrency, emphasizes that investors could lose all their money, and advises only investing what one can afford to lose.
It could also be a scam if you are told “it's as good as cash.” Crypto is not protected or regulated like cash or the US dollar. Crypto is volatile and a substantial risk. Invest only what you can afford to lose. Crypto scammers are experts at getting you to buy their digital assets.
Suze Orman Says 'Everyone Should Absolutely' Own Bitcoin But Adds One Catch… 'You Gotta Be OK With Losing That Money' In Case She's Wrong.
Warren Buffett's skepticism towards cryptocurrencies is rooted in sound investment principles. The inability to value crypto through the present value of future income streams leaves only the greater fool theory as a justification for purchasing it.
Ricardo Benjamín Salinas Pliego, a billionaire from Mexico and one of the three richest people in the country, has put 70% of his wealth in bitcoin.
Key Takeaways. The IRS treats cryptocurrency as property, meaning that when you buy, sell or exchange it, this counts as a taxable event and typically results in either a capital gain or loss. When you earn income from cryptocurrency activities, this is taxed as ordinary income.
Key Points. Michael Saylor's base case puts Bitcoin at $13 million per coin by 2045, which would turn a $100 investment today into $15,115 in 20 years. Even Saylor's most conservative (or least preposterous) $3 million target would deliver a 3,388% return, beating the S&P 500's historical averages by a healthy margin.
The 1% rule in crypto trading is a risk management strategy where you never risk more than 1% of your total trading capital on a single trade, calculated by setting a stop-loss to limit potential losses, helping protect your overall portfolio from significant damage and reducing emotional trading. For example, with a $10,000 account, your maximum loss on any trade is $100, achieved by adjusting your position size based on where you set your stop-loss.
He suggested selling a portion of the position if the price gains 50% and setting a stop-loss or risk threshold if it falls 30% from your entry or if your portfolio allocation becomes too large. This logic makes sense because if you're down 30%, you may want to consider moving on before you lose even more money.
The Problem With Crypto
It's wasteful. He's criticized its massive energy consumption and how it facilitates anonymous transactions that can't be reversed. Unlike other digital payment systems, which he sees potential in, Bitcoin and similar assets don't align with his vision for practical financial innovation.
Ramsey's Simple Three-Investment Rule
In a 2024 video, Ramsey said, "I have three investments — that's all I have: my business, paid-for real estate and mutual funds. I don't play single stocks. I don't screw around with gold. I don't mess with Bitcoin."
In the US, all cryptocurrency exchanges must report transaction information to the IRS under the Bank Secrecy Act. This includes customer names, addresses, SSNs, and transaction details.
If you're holding crypto, there's no immediate gain or loss, so the crypto is not taxed. Tax is only incurred when you sell the asset, and you subsequently receive either cash or units of another cryptocurrency: At this point, you have “realized” the gains, and you have a taxable event.
Capital gains tax on $300,000 depends on your filing status and total income, but for most, it will be taxed at the 15% federal rate, meaning around $45,000 in tax, potentially rising to 20% if your total income is very high, and you'll also need to account for state taxes and potentially a 3.8% Medicare surtax. A $300,000 gain usually falls into the 15% bracket for single filers (above $48,350) and married filing jointly (above $96,700), while for married filing separately, it hits the 20% bracket (over $300,000).
The 10,000 Bitcoin spent on two pizzas in 2010 by Laszlo Hanyecz is now worth over a billion dollars, making it one of crypto's most famous stories, known as "Bitcoin Pizza Day," highlighting Bitcoin's journey from valueless digital tokens to a major asset, with Hanyecz later using the Lightning Network for pizza, and the original recipient reportedly spending the coins on a trip.
Gold's 20-Year Return
Through the end of 2024, gold had posted a 20-year average annual return of 9.47%. If you had invested $10,000 at the start of this period, you'd have $65,967 in your account, a total gain of roughly 560%.
Investing $100 in Bitcoin about 10 years ago (around late 2015/early 2016) would have turned that initial amount into tens of thousands of dollars, potentially over $30,000, given Bitcoin's massive growth from roughly $300-$400 per coin to over $100,000 by late 2025/early 2026, though exact value depends on the specific purchase price and current market fluctuations, representing an astronomical return but also highlighting Bitcoin's extreme volatility.
James Howells, the man who accidentally threw away a hard drive with thousands of Bitcoin (originally around 7,500 to 8,000 BTC) in 2013, has spent over a decade trying to get it back from a landfill in Wales, but has largely given up after numerous failed attempts and rejections from local authorities, with a judge ruling his quest unlikely to succeed, though he's explored tokenizing the assets and even buying the landfill site.