The following post is brought to you by Tom Dunleavy. Tom works in the Investment Consulting industry advising pension and 401-K plans, worth over a collective $5 billion dollars in assets. He writes about investing, personal finance and building your retirement portfolio over at investmentbasecamp.com.

Admittedly, I’m actually one of the “suckers” who is holding cryptocurrencies, albeit a minuscule amount. Otherwise, it would have been painful to publish this article. I’ll say it again– never speculate in something that you cannot afford to lose.

Interestingly, Bitcoin is still up 75% from when I first wrote about it in spite of the prolonged downturn.

Bitcoin has been in the headlines almost daily for the past two years. But prior to 2017, almost no one had ever heard of the cryptocurrency or any others for that matter. But today there are over 2,000! This ridiculous growth of cryptocurrencies and interest in the space sent Bitcoin rocketing, well, into space. The price went from $200 in early 2015 to almost $18,000 a bitcoin in December 2017. So with all of this crazy volatility, we can safely assume bitcoin won’t stay put at its current level of around $4,000. (This ride really puts the best and the worst days of the Dow in perspective).

Should you be a buyer or a seller of the cryptocurrency? Let’s discuss a little background then discuss some pros and cons of Bitcoin to find out if you should feel comfortable putting your money behind it.

Why has Bitcoin fallen lately?

The biggest reason is the release on the CME. Since then traders have gained the ability to short bitcoin. Previously they could just not buy it if they didn’t like it. This has allowed negative sentiment to creep in across the market.

The increased publicity has also brought in the regulators. They have largely left Bitcoin itself alone but have target other cryptos (and by proxy hurt Bitcoin). Initial coin offerings have been cracked down across the market by the SEC. Airfox and Paragon Coin have both been fined over $250,000 for not registering their initial coin offering sales. Both tokens are deemed securities by the SEC, and they are seriously enforcing regulation on the ICO market now. SEC Chairman JayClayton also wants to see better market surveillance and custody for cryptocurrencies before being “comfortable” with a Bitcoin ETF. “We’ve seen some thefts around digital assets that make you scratch your head,” he said.

The Bitcoin community has also been hurting itself. There is a large amount of infighting between two different groups over the future of Bitcoin Cash. A substantial fraction of the bitcoin mining community including a number of big players, who own lots of bitcoin, have been selling and repurposing mining power in order to “win” the Bitcoin Cash war. Some supporters see this as short- to medium- term problem. It could possibly even be a positive move by potentially moving some of the bitcoin out of the hands of some of the bigger fish.

The Case Against Bitcoin and Crypto

Lack of Fundamentals: Fiat currencies like the dollar are not only supported by the idea of the currency and government who creates them but also the government’s ability to tax. Support of cryptos like Bitcoin is only valuable if someone else will buy your bitcoin for more than you pay for it. There is no underlying floor for stability.

Image Problem: Bitcoin has gotten the label of being used by criminals and in illicit transactions. While this may have been a large utility of bitcoin in the past, because of its untraceable nature, it is representing less and less of the use case for the currency.

Exchange Hacking: While bitcoins themselves haven’t been duplicated or compromised, Bitcoin exchanges have been. The biggest hack was when Mt. Gox, a bitcoin exchange, was taken for 750,000 bitcoins! It’s hard to use a currency when you can’t have faith in transacting in it without fear of it getting stolen.

Slow Processing Times: Bitcoin transactions take a very, very long time to process. Check out just how slow in the chart above, compared to Visa and Mastercard.

The Case for Bitcoin and Crypto

An Alternative to Fiat Money: Maybe not to the US dollar (in the short run) but for countries with unstable currencies Bitcoin is gaining steam. Bitcoin and Dash are both doing great relative to the Venezuelan Bolivar, for example, and are in high use in Venezuela.

We are still in the early stages: Some liken crypto to the adoption of the internet. Adoption might take a bit of time but when it finally does take off, watch out.

Finite amount: While the economic fundamentals of Bitcoin are a bit suspect it does have one thing going for it: there will only be so many Bitcoins ever created. There will only be 21 million bitcoins that can ever be mined. Once that number is hit there will be no more created. This is, of course, different than currencies like the dollar or the pound where the central bank can essentially print as much as they desire.

Privacy: No government tracking. No logging transactions. No letting the proper channels know when you want to move a certain amount.

Mainstream adoption is growing: Exchange operator Nasdaq has confirmed it’s moving ahead with a plan to list Bitcoin futures in Q1 2019, betting on sustained interest despite a dramatic plunge this year. The NYSE also is preparing its own Bitcoin futures exchange called Bakkt.

The Bottom Line

If you are for or against Bitcoin it’s going to be a wild ride. As the chart below shows there have been some CRAZY whipsaw corrections. For my money, I am staying away from cryptos completely. It’s just too early to see who the winners and losers will be out of the 2,000 cryptos currency in existence. Could it be Bitcoin? Sure. But Bitcoin could also be MySpace to another crypto’s Facebook.

Are you buying or selling Bitcoin? Leave your best argument for either side in the comments below. If you want to think about something a little safer your portfolio our perfect five dividend stocks to build your portfolio around is a good place to start.