Should you or should you not invest in Bitcoins; that seems to be the million dollar question for interested crypto investors. Since its debut in 2009, Bitcoin has been a pioneer in the crypto space, ushering in a new era of digital assets. For a decade people have shown an active interest in investing in this cryptocurrency in the hope of becoming rich quickly. It is also believed that this decentralized digital currency will one day be able to replace traditional monetary systems.
A complete transition remains a distant dream but the crypto space is marked by great volatility. In the process of adoption of cryptocurrencies people have launched ICOs without regulation or supervision. Virtual currencies have made their presence duly felt even though there are no physical Bitcoins. Their value is determined by the blockchain comprising of a network of computers. This is what makes the cryptocurrency both legitimate (facilitating money transfers across borders) and illegal (having been used for money-laundering) at the same time. No surprises then why some detractors feel that the Bitcoin bubble will burst soon while others see a lot of potential in this asset. Visit https://kryptoszene.de/bitcoin-robot/immediate-edge/ to know how bitcoins are swiftly traded using automated trading bots.
According to Dan Roseman of Coinality.com, the Bitcoin has a lot of intrinsic value being a self-regulating payment network that anyone can afford. Using the blockchain technology, you can now send any sum of money to anyone across the globe at practically zero costs besides the expenses of an internet connection. He feels that the Bitcoin will be a disruptive innovation much like the Internet, breaking down financial barriers.
In their book, Money Master the game, Tony Robbins, Ray Dalio, and Warren Buffet recommend index investing which they feel entail lower fees and risks. This ensures that an investor does not put all his eggs into one basket and has a diversified portfolio. Paul Veradittakit, partner at the Pantera Capital, recommends diversification since cryptocurrency investments are risky as there is high volatility. So, you would want to ensure that you have multiple investments and hopefully one of these will do well.
According to Jake Mann of Insider Monkey, the main difficulty with mining is that miners are incentivized to hoard the currency when they receive it. This leads to price volatility and the only way to resolve this is to make it compulsory for miners to exchange their newly-mined coins for some other currency that they like. According to CFA Phillip Christenson, Bitcoin is an investment that he would rather not touch even though this global currency could do away with need for exchanges and make global trades easier. Bitcoins are not controlled by banks and this reduces risks of manipulations by dictatorial governments. However, he is not keen to make this a part of his client’s portfolios.
In Robert Lon’s opinion, the Bitcoin is now a decentralized digital currency for trading services that is not government-backed. It is an unregulated currency which is not taxed. Regulatory attempts have been made by many governments but these have not been successful. So, Bitcoins will need to be regulated in order for it to have power. In this context, one can mention that the FICEN has suggested that cryptocurrencies also be subjected to regulatory responsibilities like any other financial institution. He feels that since the Bitcoin has no borders and is not controlled by any government, it is truly decentralized but it has a long journey ahead. It has to be adopted more and the people using it must also be made more informed.