Signing up for credit cards through partner links earns us a commission. Here’s our full Advertising Policy.
Bitcoin and other cryptocurrencies have generated lots of buzz in the news recently. Team member Keith has a strong opinion on the topic, which he’ll share with y’all!
Keith: When I think of a “currency,” I imagine having a bill or coin I can give to someone in exchange for a product or service.
The lack of regulation and extreme price volatility in cryptocurrencies will keep me from investing in one anytime soon. Instead, I’ll continue to focus my time and effort into earning and redeeming miles & points. Because I don’t have to take a big risk and can still get a reward, like thousands of dollars worth of free travel!
I encourage everyone to do their own research and consult with financial professionals when considering investment opportunities. That said, I’ll share my personal views on this hot topic!
Buying Cryptocurrencies Is Not the Same as Investing in Blockchain Technology
I love financial innovations that make life easier, like sending money to friends or family using Venmo. While cryptocurrencies are certainly an innovation, I’ve yet to understand how one specific cryptocurrency is better than another, other than a flawed supply and demand argument.
Consider there are more than 1,400 different cryptocurrencies which have been developed in recent years. Meanwhile, there are only 180 actual currencies around the world (like the dollar, euro, and pound) recognized by the United Nations, including some which have been around for 1,000+ years.
The headlines have not been favorable for cryptocurrencies so far in 2018.
And the significant drop in the price of popular cryptocurrencies like Bitcoin and Ethereum hasn’t been a good sign, either. At its peak in mid-December 2017, 1 Bitcoin was worth ~$19,500. But the value dropped by nearly 50% in less than 1 month.
One of the major rules I learned when studying finance is don’t invest in something you don’t understand and aren’t familiar with. For some folks, there’s confusion between buying cryptocurrencies and investing in the technology that makes it possible, which is known as blockchain.
While I’m not an expert on blockchain, I’ve read enough to learn there’s significant potential for this technology. It can make financial transactions faster and cheaper, and eliminate fraud. These are a few of the reasons why major financial and technology companies, including Google and Goldman Sachs, have invested in blockchain firms.
But as you’ll see in the below infographic, blockchain transactions do NOT require that you to use cryptocurrency.
So, other than pure speculation, why do prices of individual cryptocurrencies fluctuate so much? I don’t have answer and that’s why I’m staying away from buying digital currencies!
The Return on Investment With Credit Card Miles & Points Can Be Huge!
As Million Mile Secrets team member Meghan recently shared, there’s a strong connection between personal finance and the miles & points hobby.
Of course, collecting miles & points is NOT a long-term investment strategy. But earning and redeeming credit card rewards can save you money you’d otherwise spend on vacations. And extra cash in your pocket can help your financial goals, like saving for retirement.
Booking travel with miles & points has allowed my wife and I take unforgettable trips we would have never considered if we were paying cash, like an around-the-world honeymoon!
My favorite part about the miles & points hobby is no travel goal is out of reach. Just take a look at these posts with award travel success stores shared by Million Mile Secrets team members and readers:
- This Retired Veteran Is Using Miles & Points for an Epic 29-Country (and Counting) Journey!
- 1.1 MILLION Miles & Points for Nearly $66,000 Worth of Travel to New Zealand and Sydney!
- Over $20,000 Saved on a Family Vacation for 5 to Europe!
- Reader Nico Used Miles to Visit 21 Countries in 12 Months!
Consider miles & points have their drawbacks too. For example, hotel and frequent flyer programs can devalue their award currency with little or no notice. And flexible points programs can drop transfer partners. That’s why I never recommend hoarding the rewards you earn because a good deal today could be gone tomorrow!
So instead of investing money in cryptocurrencies you can’t control, you can invest time in planning your next adventure. Then, start collecting the right miles & points to get you to your destination.
Be sure to check out our “How to Get to Guides” for tips on saving money on your next journey!
Instead of investing money in risky cryptocurrencies like Bitcoin, Million Mile Secrets team member Keith says he’d rather invest time collecting miles & points with travel rewards credit cards!
Lots of investing experts (including Warren Buffett) don’t have high expectations for cryptocurrencies. And the prices of certain digital currencies recently dropped by ~50%!
Of course, earning rewards isn’t a long-term investment strategy. But dedicating time into learning how to use miles is worth more than throwing money at Bitcoin because with miles you have a guaranteed return of experiencing fantastic trips.
You can get a huge return on investment by collecting the right miles & points. This makes no travel goal out of reach, so you can travel around-the-world for a fraction of what it would cost if you paid cash.
What are your thoughts on cryptocurrencies like Bitcoin?