Why on earth would I want to spend my bitcoins now, when they're worth so little compared to when they peaked? Shouldn't I wait and hope that the price rises again? The short answer is "No, because I feel like spending my coin." I want some new stuff and I want to buy it with bitcoins, but that's not all there is to this decision. There are always reasons to hold and reasons to spend, but right now, I'm leaning fairly heavily towards spending a bit of my coin.
Why I Shouldn't Spend
Let's go back to about a year ago, after we had just witnessed Bitcoin's largest bubble. Within months, the price had spiked from a few hundred dollars up to around $1200. Then it backed off a little and has been falling ever since. It was also around that time that we began our weekly Bitcoin podcast. During one of our first few episodes, the price was sitting around $1000 (after the peak, not before) and we decided we would try not to sell much Bitcoin. We would rather hang on to it because the price could skyrocket again at any time.
I still support that plan in many ways. I'm no financial advisor, so don't take my opinions too seriously, but I still generally believe that it can be wise to keep your coin. If you don't need or want to sell it, there's a reasonable chance that it will be more valuable down the road, possibly much more valuable, given Bitcoin's history.
Why I Should Spend
Despite that, let me explain why I'm tempted right now to spend some. Someone once explained to me why investors should rarely look backwards. Hindsight is always 20-20, as the saying goes, and if an investor spends all of his time looking at the past, he will always see a better trade that he could have made - a time when he could have bought lower or sold higher. This will cause him to see many of his investments as failures, because he could have made perhaps a thousand dollars instead of a hundred.
I'm currently making decisions about how I should spend my coin, not how I have spent it, so that advice is not fully applicable, but the principle is still meaningful. A gain is a gain, no matter how small, and it's dangerous to get caught up in how I could have made more.
In addition, we need to remember that Bitcoin's value is not guaranteed in any way. We often discuss the possibility that something better could replace it. So while I'm in the black, why not secure some of my gains? Not into dollars of course, that would be a waste of time. There are important differences between selling and spending Bitcoin. How about I secure my gains with something that is useful, versatile, and will improve my current endeavors, like say, a new high quality microphone for podcasting?
Leave a comment and let us know if you would consider spending your Bitcoin now! What would you buy?