January 6, 2014

What Should I Do With My Bitcoins?

We saw Bitcoin prices skyrocket a few months ago, followed by a bit of a tumble, yet prices remain much higher than they were prior to the initial jump. Many may be wondering what they should do with their stash. Should you hold? Should you sell?

Our feeling is kind of neither. If everyone holds onto their bitcoins, waiting for a good time to cash in, that could be very bad for the currency. It could stagnate and then eventually be followed by a sudden crash as it becomes essentially useless. We'd like to see Bitcoin become a legitimate currency, and the only way to do that is to SPEND IT.

We aren't saying you should spend your whole stash in one go, but spend it when you can. Companies need to be shown that there's a significant number of people who want to buy their goods and services using Bitcoin. Big retailers can see that prices are still quite volatile, and this may discourage them from wanting to accept Bitcoin at this point in time, so it's up to holders of the currency to show them it's worth the risk. Plus, using Bitcoin for commerce can help keep the flow steady and may stabilize prices, reducing the risk of accepting the currency in retailers' eyes.

The good news on this front is major e-retailer Overstock.com will start accepting Bitcoin later this year. Support this move and support Bitcoin! This is a great opportunity to show other major retailers that Bitcoin is for real. If there's something you need to buy, buy it on Overstock.com using bitcoins and then replenish your supply afterward. This way, you lose very little and do great medium-to-long-term good for the currency and its holders. This may seem like a bit of trouble, but ultimately it will be good for the market price of your stash.