Every once in a while, somebody asks me what I think about cryptocurrency, particularly Bitcoin.

Well, I’ll tell you what I think. I don’t like it, I don’t trust it, and I have absolutely no interest in putting my hard-earned money into it.

Now, before all the Bitcoin enthusiasts jump down my throat, let me explain why.

I’ve been around long enough to see just about every investment craze come down the pike. I’ve watched people make fortunes, lose fortunes, and convince themselves that this time it’s different.

And maybe cryptocurrency is different. But different doesn’t necessarily mean better.

Here’s my biggest problem with Bitcoin. What exactly am I buying?

When I buy a share of stock, I’m buying a small piece of a business. That business might own factories, real estate, equipment, patents, and other assets. Hopefully, it’s producing something people want, making money, and growing.

When I buy a bond, somebody owes me money and has agreed to pay me interest.

When I buy real estate, I own something tangible. I can walk through it, rent it, improve it, or collect rent from it. Even if the real estate market takes a beating, I still own the property. The building doesn’t disappear because somebody on Wall Street changes his mind about what it’s worth.

And I’ve been buying and selling antiques and collectibles for decades. I’ve handled everything from fine jewelry and precious metals to furniture, artwork, and rare collectibles. I know that markets change, tastes change, and values can go up or down. But at least I’m buying something that actually exists, something I can examine, research, and evaluate based on its history, rarity, condition, and demand.

Take gold and silver. Their prices fluctuate, sometimes dramatically. But gold has been recognized as a store of value for thousands of years. It has industrial uses, jewelry applications, and a worldwide market. If I own an ounce of gold, I own an ounce of gold regardless of what somebody is willing to pay me for it today.

Now, I’m not suggesting that real estate, antiques, or precious metals are guaranteed investments. Far from it. I’ve seen plenty of people lose money in all three. But there’s an underlying asset that I can understand and evaluate.

But Bitcoin? I’m buying a digital asset that doesn’t produce anything, doesn’t pay interest, doesn’t generate earnings, and whose price depends largely on what somebody else is willing to pay for it tomorrow.

That sounds an awful lot like speculation to me.

And it reminds me of something that happened almost 400 years ago.

Back in the 1630s, in the Netherlands, people went absolutely crazy buying and selling tulip bulbs. That’s right, tulips. Those pretty little flowers you plant in your garden.

Certain rare tulip bulbs became so desirable that people were paying extraordinary amounts of money for them. Some bulbs reportedly sold for prices comparable to the cost of a house.

Think about that for a minute. A flower bulb!

People weren’t necessarily buying these bulbs because they wanted beautiful flowers in their gardens. They were buying them because they believed somebody else would come along tomorrow and pay even more.

Sound familiar?

Then, in 1637, the market collapsed. Buyers disappeared, prices plunged, and people who thought they were sitting on fortunes suddenly discovered that their tulip bulbs weren’t worth anything close to what they’d paid.

Historians still debate just how widespread the financial damage was, but the lesson from Tulip Mania has survived nearly four centuries.

Just because somebody is willing to pay a ridiculous price for something today doesn’t mean somebody else will tomorrow.

And we’ve seen this sort of thing happen over and over again.

Remember the dot-com bubble in the late 1990s? Companies that barely had any revenue, let alone profits, were being valued at hundreds of millions of dollars simply because they had a website and a good story. Then the bubble burst, and investors lost enormous amounts of money.

Or how about the housing bubble leading up to 2008? People were buying houses they couldn’t afford, lenders were handing out mortgages that never should have been approved, and everybody seemed convinced that real estate prices could only go up.

We all know how that ended.

Even in my own business, I’ve seen speculative crazes come and go. Certain antiques and collectibles that people once fought over at auctions eventually fell out of favor. Something that brought thousands of dollars years ago might struggle to bring a few hundred today.

The same thing happens with precious metals. Remember when silver shot up to nearly $50 an ounce in 1980? It subsequently collapsed, leaving plenty of people holding silver they had purchased at inflated prices.

The common denominator in all these situations is human nature.

People see their neighbors making money. They hear stories about somebody becoming a millionaire overnight. They get afraid they’re missing out, and before you know it, everybody wants a piece of the action.

And that’s when I start getting nervous.

Now, I’m not suggesting Bitcoin is exactly the same as a tulip bulb. It isn’t. Bitcoin has a functioning global network, a limited supply, and millions of people who believe in it.

But the psychology behind speculative markets hasn’t changed much in 400 years.

I understand the argument about Bitcoin’s limited supply. There will only ever be 21 million Bitcoin. Fine. But scarcity alone doesn’t make something valuable. I could paint a picture in my basement, promise never to paint another one, and that wouldn’t necessarily make it worth a million dollars.

And then there’s the volatility. An investment that can lose 20 or 30 percent of its value in a relatively short period of time isn’t something I want to depend on for my financial future.

I also have a problem with the enormous amount of hype surrounding cryptocurrency. Every time the price goes up, we’re told it’s the future of money. Every time it crashes, we’re told it’s a buying opportunity.

Funny how that works.

And don’t even get me started on the scams, stolen digital wallets, collapsed exchanges, and people losing access to their fortunes because they misplaced a password.

I realize blockchain technology has legitimate applications, and I don’t dismiss the possibility that digital currencies will play some role in our financial system. But recognizing that a technology has potential is entirely different from believing every investment associated with it makes sense.

Look, I’m approaching 70 years old. I’ve spent a lifetime working, investing, buying and selling businesses, antiques, real estate, and just about anything else I thought had value.

And one thing I’ve learned is that you don’t have to participate in every opportunity to become financially successful.

I’ve missed plenty of investments that made other people rich. And you know what? I’m perfectly fine with that.

Could Bitcoin double or triple from here? Absolutely. Could it lose half its value? Absolutely.

But here’s the thing. I don’t need to find out with my money.

I don’t begrudge anybody who has made a fortune in cryptocurrency. Good for them. But making money on something doesn’t automatically make it a sound investment.

There’s a difference between investing and betting on what the next guy will pay.

Maybe someday I’ll be proven completely wrong about Bitcoin. It wouldn’t be the first time I’ve been wrong about something, and it certainly won’t be the last.

But until somebody can explain to me why I should exchange real dollars, earned through real work, for something whose value depends so heavily on speculation, I’ll stick with investments I understand.

At this stage of my life, I’m much more interested in keeping the money I’ve made than chasing money I might make.

And remember, 400 years ago there were people who were absolutely convinced that tulip bulbs were the investment of a lifetime.

Turns out, they were just flowers.

And if that means missing the next Bitcoin millionaire club, well, I guess I’ll just have to live with that.What are your thoughts about cryptocurrency?

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