Should You Invest in Bitcoin? Pros and Cons |
Posted: January 15, 2018 |
Bitcoin is taking the world by the storm and many are people are wondering if it’s a smart investment. Obviously, buying it several years ago for about $100 was a good idea. Today some of the people, who’ve done it, have become millionaires. However, right now, when the price for one coin is about $15,000, it’s harder to make a decision.Is it late to invest in Bitcoin? Let’s check out some pros and cons.
Pro #1: The Hype Is OnBitcoin is running hot today. In 2017, its price was as high as $19,800. Even though the rate decreased, it’s far from what it used to be a year or two ago. If you had purchased 1,000 bitcoins in 2010, when they cost $100 a piece, today you’d have 15 million dollars. Sounds like a quick way to make a fortune. Today, bitcoin is considered a safe way to keep your money. It’s even outdoing the gold. While the hype is on, the experts are promising a price increase, at least until the middle of 2018. Pro #2: High Blockchain PotentialThe most logical reason for bitcoin growth is the potential of the blockchain technology. The blockchain is a digital decentralized registry, which allows the transaction registration without a financial intermediary. In most cases, blockchain is a network with an open source code, which means it’s practically impossible to hide any data changes. Such level of security creates impressive perspective for the blockchain development as a payment system platform. This, in turn, allows bitcoin to stay on top of its game. Pro #3: Intriguing StabilityBitcoin is alive and doing very well due to the market instability. Market crashes have been and always will be a thing to fear. While in the USA, such market uncertainty is usually kept to a minimum, other countries, suchas Zimbabwe, where local currencies have no value, have embraced bitcoin. Active bitcoin markets are thriving in many countries, such as Japan, where monetary easing is making people uneasy about their currency’s value. Pro #4: Overall TrustThe way the cryptocurrency has behaved in the past year allowed people to feel trust toward the coins. The bitcoin fans have seen how the currency’s value decrease slightly only to go up again. This trust is a certain way to guarantee the bitcoin’s stability. Even though the number of bitcoins is limited, the time when they are all mined is too far in the future to think about. Pro #5: Impressive LiquidityBitcoin is mostly easy to use. It’s easy to buy and sell bitcoins. The number of bitcoin markets is increasing every year. Today,some of the stores already accept bitcoins. Meanwhile, bitcoin is not dependent on political scrapes. Such independent currency can’t be hurt by any local political or social ordeals. Con #1: Unclear Future Of Blockchain TechnologyEven though the potential of blockchain technology is rather high, no one knows how fast it will be implemented to allow transactions. Perhaps many businesses won’t consider the bitcoin blockchain the ideal method for their work. Today, there are more than 1,000 cryptocurrencies in the world. Some of them have their own blockchain. The competition is high and it can get even higher due to new currencies. Con # 2: The Bubble ScareMany investors are scared about investing in bitcoin next year due to a potential bubble burst. Of course, the bitcoin’s rise has many reasons so the bubble is not the only explanation. Meanwhile, the bitcoin is highly volatile. Some experts believe that it’s about to stabilize and the growth won’t be as significant. Con #3: Investors’ MoodSo far, emotions have helped bitcoin grow. However, it’s well-known that investing based on emotions, not logic, can lead to depreciation. Judging from the number of ads and sales pitches calling for people to invest in bitcoin or start mining shows that investors’ need to believe in a bubble. Emotions aside, it seems that investing in bitcoin is a risky endeavor. Con #4: It’s Not RealAs opposed to any other currency you can physically touch, Bitcoin is nothing more than a math algorithm. The trust in math creates the bitcoin value. Meanwhile, such value can disappear in a flash.
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