Though there is risk in both speculative investing and investing, a good way to differentiate is thinking of speculative as a high risk investment, or a ‘get rich quick scheme’. Think of investing as being lower risk, more fundamentally based and analysis driven.
This leads to the conversation of bitcoin. Fed Chair Janet Yellen calls it being a “highly speculative asset”, “not a stable store of value and doesn’t constitute legal tender”. Though there is value in block chain there really isn’t an obvious way of valuing it. It could be worth $1 or $1 million.
With the Federal Reserve not seriously considering bitcoin as a possibility for future currency, I like to think of investing in bitcoin like trading baseball cards. The value of those baseball cards are in the eye of the beholder.