Is Bitcoin a Reliable CryptoCurrency If You Do Not Have Supportive Revenues

You may wonder whether it is prudent to invest in Bitcoins if you do not have other means of revenue to support you. This is a valid question because you do not want to invest everything you got in a single crypto asset and lose everything at one go. Like any payment method today, Bitcoin has been integrated into the current economy, even though it is not really a secured currency like a traditional fiat currency. This clearly tells you that there are risks of investing in Bitcoin just like there are risks in investing in any other asset.

However, the future of Bitcoin till now appears to be quite promising and you can invest in it provided you also have invested in other assets. It is unwise to put all your eggs into one basket. Only a diversified portfolio where you have spread out your investments can reduce risks. While Bitcoin prices have been encouraging there have also been unprecedented drops and this makes even the most experienced investors wary of Bitcoin investments. Warren Buffet had stated that he is not too keen about this crypto coin as it is a soap bubble. Given his contributions to the field of economics, one should not dismiss the risks he speaks of.

  • To begin with, the notion of cryptocurrency is completely new and there is no historical data or experience that you can refer to for evaluating it. Bitcoin, in this sense, it still in a nascent stage and quite experimental in that regard, albeit slightly less than other crypto coins. Unlike traditional assets the Bitcoin is not meant for conservative investors.
  • Technologies are coming out every day and in a manner which is beyond our control. People know that the Bitcoin exists, but every day there are a few more competitors entering the crypto space to challenge its existence. Even though Bitcoin enjoys brand awareness amongst crypto enthusiasts there is always the risk that there may soon be another more advanced cryptocurrency that assures better returns.
  • Bitcoin prices fluctuate dramatically and this only adds to its riskiness. While financial experts can quite accurately forecast the values of a real currency or stocks, they cannot predict what value the Bitcoin will hold the next day. There are many factors that are responsible for variability of this crypto coin’s value, such as legislative measures by regulatory agencies, large exchange trading volumes, and integration of the Bitcoin with other businesses, etc.
  • Bitcoin will not offer any protection for consumers and transactions once made cannot be done or tampered with. When there is a failed transaction, you can at the most request the recipient to return the money voluntarily. This is because there is no guarantor here like in the case of credit cards where the bank is the guarantor. The fact that transactions are immutable does not deter investors in any way; however, they must be aware of the threat.
  • In case an attacker gets access to your private key, he can easily steal money from your wallet. This has happened quite often with Bitcoin users when they have accidentally misplaced their secret keys.
  • Depending on where you stay there may be a different approach towards the Bitcoin. Since there is no well-conceived unified regulatory system for crypto coins as yet, the uncertainty remains. Governments suspect that Bitcoins are used for illicit activities; they are free to ban Bitcoins at any time.

All this shows that Bitcoin may be a reliable crypto asset but worth investing in provided you have other supportive revenues to depend on.