Bitcoin is the most successful of all the cryptocurrencies there are.
The drastic growth of its value in recent years had captured the attention and interest of people from all walks of life. However, despite its success, the looming question is:
will Bitcoin ever be a safe investment or will it always stay as a gamble? Knowing the risks involved when investing in it is the first step.
The first thing to consider, which sounds risky to some, is that Bitcoin does not have a physical appearance. You are exchanging tangible credits into something that does not have any form.
You are relying on a cyber-wallet that holds the supposed amount of credits you have. Because of this, it can be prone to hacking & cyber-attack. The World Wide Web has always been filled with loopholes that certain individuals can exploit in order to gain control of your personal account and steal your hard-earned asset.
The next risk is that Bitcoin is unregulated; no government has sanctioned the use of Bitcoin in doing business transactions.
Some governments go as far as warning its general public in using Bitcoin. Another sample of its volatility can be seen on how its value fluctuates.
At one moment the price can be as high as several thousand per coin and the next second it can go down to just a few hundreds.
Its value relies on the supply and demand whereas the supply can be manipulated by a group to force each coin’s value to soar as much as they desire so.
Investors are exposed to fraud and the government is powerless to pursue the perpetrators since Bitcoin is not state-sanctioned for transactional use.
Having pointed out the risks involved when investing in Bitcoin, it all comes down to the fact that any type of investment—be it stock market, bonds, or insurance–
has some levels of risk and can be, straightforwardly, a sort of gamble.