Today, you can make millions by trading international currencies that aren’t linked to banks or traditional forms of finance. The internet really is a wonderful thing. One of the most remarkable ways you can make money online is to mine and trade Bitcoin. Bitcoin needs no introduction because it’s THE cryptocurrency when it comes to popularity. If you know about any of them, you know about BTC.
And yet, it’s by no means the best option for investors. People see it as a good option to add to their portfolio, but it’s destroyed lots of investors’ chances. When you don’t understand the potential pitfalls, then you run the risk of losing money, and that’s not a healthy ROI attitude. Of course, by learning the truths of Bitcoin and cryptocurrencies as a whole, the odds of succeeding are higher.
Therefore, here are five facts for the information that you should consider to help you make an informed investment decision.
Compared to other cryptos, Bitcoin has had the most turbulent life so far. At one point in 2018, it’s per coin price value shot up to over $20,000 from an index of $7,000 a few weeks before. Then, it rapidly started decreasing as the value settled at around $9,000 for now. Yes, it still has the highest value of every currency. However, that’s not the whole story.
As Bitcoin has already proved, it will fluctuate, often at alarming rates. This could work out in your favour if it goes up and you sell, yet it can cut into your profits, too. Sure, you can leave it to mature and wait for another opportunity, but then it’s hard not to let previous experiences guide your decisions. You could lose out thanks to the fact that you can’t trust BTC to offer steady, reliable returns on investment.
There are plenty of opportunities. Still, you must also be aware of the drawbacks and keep your eye on your portfolio.
There Are No Second Chances
One of the pros of Bitcoin that people love to talk about is that it isn’t linked to standard currencies. Therefore, governments and banks can’t rip off ordinary people who are trying to increase their wealth, which is believed to be the reason there is scepticism around crypto. Even if this is the case, the flip side of the argument means there is no avenue for refunds.
Typically, this refers to payments to and from your portfolio. If you buy something with Bitcoin and don’t like it, you are screwed. Yet, there is a bigger danger for investors: cybercrime. Because BTC is more of a concept than a tangible asset, there’s no way to get it back once somebody steals it. And, hackers will try. In 2017, a mining service was robbed to the tune of over $60m. As a result, you have to be incredibly confident that your investment is safe and secure, and has the latest protection.
As well as being expensive, it’s also hard to decide which hardware and software to use as the market is saturated.
Bitcoin Isn’t The Only Option
The stark reality is that there are currently hundreds of cryptocurrencies on the market. As soon as Bitcoin hit it big, new currencies flooded the industry in an attempt to cash in on crypto’s success. Of course, some options were, and still are, duds. If you pick them, you run the risk of losing out big time.
Still, a selection of cryptocurrencies are designed to command high prices. ETH is a prime example, yet the one that people are talking about the most is Ripple (XRP). With the best XRP exchange service at your side, you could take advantage of the predicted 80% increase that is expected in the coming weeks. Even Bitcoin struggles to offer an ROI as high as that. For those who are willing to do some research, there are numerous opportunities to make money without using BTC.
Nothing against the pioneering leader that is Bitcoin, but it’s always worth checking the alternatives before investing.
So, Not Everyone Might Accept It
Previously, it was unheard of for people to accept cryptocurrency payments and not take BTC. If they accepted anything, it was Bitcoin. Now, the industry has changed to the point where it has gone the other way. Cryptocurrencies are so popular that it is perceivable Bitcoin payments could be rejected, whereas XRP and ETH are embraced.
Why does this have any impact on investment? Firstly, part of the game is marketing. In the past, BTC hit astronomical levels partly because it was a sexy and exotic investment option. Once the others start to take over, it might affect Bitcoin’s price share, causing you to lose money. Also, a knock-on effect is that there is little to no regulation surrounding the market right now. Should governments see the need to keep crypto under wraps, there is the potential for taxes and levies.
As a result, the future isn’t all that bright for Bitcoin.
It’s A Bubble
Whether it is a bubble or not remains to be seen. However, it’s worth noting that experts have gone as far as calling BTC a Ponzi scheme. Something that is undeniable is that Bitcoin has the potential to go bust. If the bubble bursts, you’ll be left with nothing. After all, it’s not as if it has a tradeable value in the same way gold and stocks and bonds do.
The fact that investors have to rely heavily on technology is another downside. Should the tech fail, you will be left with nothing again. This doesn’t mean you shouldn’t invest in BTC, but it’s crucial you are vigilant. Even if you feel the currency has proven itself, it’s worth not over-investing and putting your portfolio at risk. Buy a small amount and wait to see what happens in the long-term. BTC is a waiting game.
Would you invest in Bitcoin? Are there alternative cryptocurrencies that you like or prefer?