Why is it still at an early time to invest in Bitcoin?
Mar 24, 2018 Posted / 3460 Views
In general, to invest is to allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future – for example, investment in durable goods, in real estate by the service industry, in factories for manufacturing, in product development, and in research and development.
Initially, the prices of Bitcoins, when it was launched was very less, relative to its value the present day. We may assume that the prices have reached the saturation level, but no one can really predict anything. Who knows, the prices can even hike to more than 50-60% than it's present value. Its value can also crash unexpectedly.There are various reason why you could still invest in Bitcoins and even Bitcoin millionaires recommend it.
It's impossible to actually value bitcoin.
Bitcoin is a global craze. Even people who have no idea what a blockchain are buying it. Because so many new people are buying it (and so quickly!), it's impossible to accurately value it.
If you are looking for a short-term investment the price of all the cryptocurrencies may fluctuate 20-30 percent in one day, it's obviously unstable, so you could either lose all of your money very quickly or make enormous profits. Especially if you need your money in the forthcoming year, don't buy bitcoin. With the insane short-term fluctuations, bitcoin is short-term gambling, not investment. Whereas in the long term it seems promising to the financial experts and may show a steady increase in the value.
There is an advantage in bitcoin.
The value behind bitcoin is the blockchain technology, which has been easily replicated by other digital currencies. Many of those have actually built better and easier-to-use versions. But BTC has something called the early mover's advantage. Since it was the first of its kind, with its huge market capital value it is estimated that it would last the test of time.
Although the trading in Bitcoin takes more time than its successors. Being the pioneer in this technology, it revolutionized the system in which the financial services were centralized.
However, there are also numerous reasons as to why Bitcoin investment can still be a disaster.
Bitcoin still isn't that secure.
You might think that digital wallets are secure, but cryptocurrency exchanges and wallets continue to get hacked regularly. More than $70 million in bitcoin was hacked from NiceHash, a bitcoin mining marketplace, recently.
Just because exchanges like Coinbase have $200 million in venture funding and a nice shiny marketplace doesn't mean that they can't get hacked either. Because there is no central governing body guaranteeing your bitcoin, if you lose it, it can be difficult to get back. If it gets stolen, then you are out of luck. Hacks will continue to happen
Despite these, Bitcoin is making the biggest revolution in the finance industry in the last hundreds of years. Some of you might be still skeptical about Bitcoin and blockchain technology, but many of world leaders, economists, industry experts, CEOs, and investors put their words down and said aloud their opinion.
Founder of the software and anti-virus company McAfee Associates.
“In the long term Bitcoin moves above $500,000 within three years. Bets?” McAfee tweeted on 17 July 2017. In his reply, he added that if it doesn’t: “I will eat my d*ck on national television.”
“It is not a speculative investment even though it is being used as such by other people. As Bitcoin network grows the value of Bitcoin grows. As people move into Bitcoin for payments and receipts they stop using US Dollars, Euros, and Chinese Yuan which in the long-term devalues these currencies.”
Co-founder of Microsoft, investor, and philanthropist
“Bitcoin is exciting because it shows how cheap it can be. Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient.”
Founder of Virgin Galactic, and 400+ businesses
“Well, I think it is working. There may be other currencies like it that may be even better. But in the meantime, there’s a big industry around Bitcoin. — People have made fortunes off Bitcoin, some have lost money. It is volatile, but people make money off of volatility too.”
Although most of the people aren't buying into the value of the technology, they're buying into the hype. This is surely gambling, not investing. But with calculated risks and effective research, investments can reap good returns. If you do decide to buy bitcoin, it is encouraged you to buy responsibly. Don't buy using more than 1 percent of your net-worth, and be honest with yourself: Bitcoin is an investment when the risks are calculated precisely, otherwise, it's a gamble. It is not very risky as it showed promising stability than other currencies recently, there are other places too to invest your money securely for the long-term.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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