By now, you’ve likely heard about BitCoin, the cryptocurrency that’s taken the world by storm. What is BitCoin and, in 2017, is BitCoin worth investing in? Let’s go over the pros and cons of investing in BitCoin so you can decide for yourself.
“Bitcoin is a technological tour de force.”
– Bill Gates
What is BitCoin
To understand Bitcoin, watch the documentary below …
The Pros of Investing in BitCoin
3 Reasons Why You Should Buy Bitcoin in 2017
1. Strong Gains that Supersede Bank Interest Rates
In 2016 alone, BitCoin has seen over a 136% gain.
Since 2015, BitCoin has risen above 400% gain.
Bitcoin is a safe haven asset like gold.
2. Smart and Wealthy Investors are Using Bitcoin
Institutional Investors like the Winklevoss Bitcoin Trust are making Bitcoin available to retail investors and commercial investors alike.
Bill Gates advocating for Bitcoin and incorporating Ethereum into the Azure Cloud platform
Tim Draper, an early investor in Skype and Hotmail, predicts Bitcoin will reach $10,000.
Richard Branson, entrepreneur and multi-millionaire, says Bitcoin is an “economic revolution”.
3. The Infrastructure is Sold. The number of users are growing.
Bitcoin has a solid infrastructure in place–the Blockchain. The fact that more and more people are investing in and using Bitcoin means that the price of Bitcoin is going upwards. Also, the growing number of users is establishing that Bitcoin is a financial instrument that can be trusted.
“Most people who doubt Bitcoin just don’t understand Bitcoin!”
– Karcher Smith
The Cons of Investing in BitCoin
Bitcoin is a Baby in the Financial Market
Bitcoin, the peer-to-peer cryptocurrency concept, is only four years old.
“Essentially, it’s a baby in the financial market,” explains Kim Sandro, an investment banker at a Fortune 500 company in the New York City. “Although it appears to be a high ROI, the risk is great, so it keeps conservative investors at bay.”
Even though Bitcoin was the first cryptocurrency to hit the market, it already has competitors. Over a period of time, it may so happen that one of the competitors may emerge to be more successful than Bitcoin. Since the cryptocurrency market is in its infancy, understanding this market and considering it’s risks may lead to more skeptics than enthusiasts.
Bitcoin Transactions are not Traceable
The fact that bitcoin transactions are not traceable may pose a threat to the people as well as the economy.
Bitcoin is a High-risk Investment
Bitcoin is not regulated by a central authority, it is subject to huge risk and instability. Its value is not decided by an authority but based on the buying capacity of the peer-to-peer network.
Bitcoins face an Uncertain Acceptance Level
Bitcoins, as an alternative currency, have not met acceptance from all mmerchants. At brick-and-mortar storefronts where maximum number of transactions take place, bitcoins are yet to be accepted. Seeing it as an alternative to paper currency may be a distant dream but as of now, people are using it more as an investment.
Loss of Wallet for Bitcoins
If you lose the key to your wallet or the computer hard disk where you have stored it crashes, there is absolutely no chance that you will be able to retrieve them back. The money will remain locked up and will not be used in any kind of transaction. This will increase the price of other bitcoins which will still be in circulation.
Restrictions and Legalities for Bitcoin
As of now, Bitcoin does not face any kind of regulation or interference from a government body. Hence, its rates are rising. However, the day governments will start controlling Bitcoin, the price of bitcoins may get adversely affected. This kind of intervention may also impose various kinds of taxes, asking for the source of money and revealing the identities of users.
In most countries, governments decide and regulate the currency. However, bitcoins have been based on a peer-to-peer network. It is not regulated by any government. Hence, the status of bitcoins’ legality is not certain.
Summary: Should You Invest in Bitcoin in 2017
Should you invest in Bitcoin? Although there’s a higher ROI (Return On Investment), there’s a greater risk. Currently, we are in the Wild West stages of Bitcoin, one that’s likely to play out as an amazing real-life movie, one in which we can invest in or enjoy watching from the sidelines.
Bitcoin is unfolding before us as a financial instrument that may prove to be the greatest disrupter of financial markets the world has ever seen.