The Motley Fool

The Bitcoin price surges! I’m still not buying

Image source: Getty Images

The Bitcoin price has surged in value since the beginning of November. Since the beginning of the month, the value of the cryptocurrency has jumped 17% in dollar terms. It’s up around 16% in sterling. 

Following this performance, the crypto asset has achieved one of the best performance of all financial assets this year. Since the beginning of the year, the Bitcoin price has increased by 125%.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

After this growth, many investors have bought into the product anticipating further gains. However, I’m still not interested in buying the cryptocurrency. There are several reasons why I plan to stay away for the foreseeable future. 

What’s in store for the Bitcoin price

The most prominent reason why I’m not rushing to buy is uncertainty. The total market capitalisation of Bitcoin is nearly $300bn, but I can’t really work out what that means.

It’s the total value of all Bitcoin in circulation, although as the cryptocurrency does not produce any cash flow or have any physical presence at all, I’m not really sure what I would achieve owning one. 

Indeed, the Bitcoin price is only really worth as much as other investors are willing to pay for it. As such, if the market for the cryptocurrency were to suddenly disappear, its worth would likely drop to zero as there would be no way of telling how much others would be willing to pay. 

Instead, I’d rather own stocks and shares. There are a couple of reasons why I’d rather own these assets over Bitcoin. For a start, it’s a lot easier to work out how much individual companies are worth. An enterprise or asset that produces goods or services,  or provides shelter (such as a house), generates cash flow and will always be worth something. 

What’s more, these assets have certain investor protections. And the world’s financial infrastructure is extremely well developed.

A better buy 

The reasons above are why I’m concentrating on stocks and shares rather than Bitcoin. I want to own high-quality blue-chip stocks that provide a valuable service or product that customers want or need, such as pharmaceutical businesses or utility providers. 

A great example is utility provider United Utilities. This company provides water and wastewater services for a large section of the UK. Therefore, I believe it has a more sustainable long term future than the Bitcoin price as consumers will always need access to fresh water. 

Another example is AstraZeneca. This company is fast becoming one of the world’s largest developers and producers of cancer medication. Once again, these are the sorts of products that are always likely to have a market, so I think the business has a much more sustainable and predictable outlook that the cryptocurrency. 

All in all, while Bitcoin has been a profitable asset to own this year, I’m still not convinced that it’s going to be a better investment than high-quality stocks and shares in the long run. 

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.