Is investing in bitcoin recommended for everyone?
The answer is: Yes, No, and Maybe.
Now, that wasn’t intended to confuse or scare you.
But to let you know that the answer depends on your understanding of the technology and the risks involved in buying, HODLing (holding) and using bitcoin
Firstly bitcoin was invented as a digital form of cash.
And to be used as a means of making direct payments for goods and services, in the same manner, that we use fiat.
But without the need for any central, third party, such as banks and other financial institutions.
However, the price of bitcoin is not stable and is subject to constant, and in many cases, considerable volatility.
This has earned it the title of digital gold as most people now prefer to buy and hold onto it with the expectation that the price will appreciate given sufficient time.
By digital gold, we mean that Bitcoin is more than just digital cash.
But it’s also a store of value and an asset class of its own, similar to gold, with the potential to make you a fortune if you just buy and hold it for the long-term.
The price tends to increase over time with a reasonable, consistent year over year appreciation recorded since its creation in 2009.
Since 2009 when Bitcoin was invented and launched to the world, the premier cryptocurrency has grown by more than 9,000,000% — a growth level that was never before seen in the history of mankind.
What Makes the Price of Bitcoin Rise or Fall?
The simple answer is demand and supply.
However, I must tell you that some level of price manipulation by the rich investors (called whales) is present as they try to increase their wealth by pushing prices up and crashing it in order to buy back at lower rates and this process can be repeated over and over again whenever it favors them.
Just like any other fiat currency or physical item – the more people want it, use it, or demand for it, the more valuable it becomes and vice versa.
The investment appeal of Bitcoin is based on the premise that the cryptocurrency will become a popular, widely accepted means of making direct payment for goods and services globally.
And thus, with the increased demand and usage comes an increase in its price per unit.
Given that supply is fixed, while the number of potential users — the world population — is exponentially higher.
So, is Investing in Bitcoin Right for You?
If you believe that the Bitcoin technology will be successful, just like the internet itself, and that most of the world will eventually adopt cryptocurrency, then yes; bitcoin is a good investment.
However, if you don’t believe in the future of cryptocurrency or the financial freedom that bitcoin proposes will become a reality, then bitcoin will most likely fail and all investors will burn in hell for being so wrong.
If you have money that you can afford to lose without losing your life, it might be a good idea to have some form of investment in bitcoin, and cryptocurrency generally.
It is better you risk losing something if the whole thing turns out to be just another mega ponzi scheme than to miss out entirely if bitcoin becomes the center of the world’s finance.
Your children, grandchildren, and great-grandchildren may not forgive you for such an expensive miss.
No one can categorically tell you what the outcome of your investment in bitcoin will be.
You will either win big or lose big.
Personally I will rather err being adventurous than overly anxious.
Click or tap to read 3 Reasons why Bitcoin is your best bet against the recession
Over to you. Do you think investing in Bitcoin and cryptocurrencies generally is a good idea? — Why or why not? — Share with us in the comments section below.