In the recent days a lot has been written about Bitcoin and other crypto currencies – both in favour and against it. However, at the end of it all the potential investor as well as the existing investor who is interested to increase his investments is confused. Everyone wants to know is Bitcoin Investment Gainful or Painful. In other words, with so much of uncertainty surrounding the world of investments the investor wants to know what to expect in future.
The questions which are going on in the minds of people are:
- Is Bitcoin a bubble or not!
- Does the current pricing level hold a promise of gains in future also?
- Despite huge popularity of cryptocurrency, will the craze die down anytime soon?
- Is Bitcoin a latest ponzy scheme?
Also refer to: Interesting Facts about Bitcoin
Bitcoin Investment Gainful or Painful ?
To answer these and many similar questions, we have compiled a fact sheet for the international as well as the Indian investors. We wish them to take an informed decision and not suffer a loss. Therefore, read the full blog and at the end is also a short video which you may like to watch.
Points in favor of Bitcoin Investment and Dealing in Bitcoin
First, the points in favour of Bitcoin Investment and the euphoria. Hence consider the following:
- During its very first year of existence in 2009, Bitcoin was not traded. Its first recorded price was in 2010 and that year its highest recorded price was $0.39! It is only in the start of 2017, Bitcoin started scaling new highs. Thanks to the increasing global acceptance and the prospect of high returns. In December, this cryptocurrency broke all the previous high records after crossing USD 19,000 mark on December 17, 2017.
- India “accounts for more than 11 per cent” of global trade in Crypto-currencies such as bitcoin and ethereum.
- The entire crypto currency market hit its peak value at about USD 700 billion in January 2018. Where the market share of Ethereum was 13% and Bitcoin cash was at 8%. Bitcoin the leader was accounting for 36% of the total value of all cryptocurrencies.
- Bitcoin is gaining more and more popularity as a worldwide currency. Founders of Yahoo, PayPal, Richard Branson etc. invest / have invested in Bitcoins.
- Bitcoin is a global popular currency. It is not subject to control or administration of any particular country.
- Being a digital currency, it has some unique possibilities such as user anonymity. Bitcoin users can transact anywhere where they have Internet access. Also personal information is not necessary to complete any transaction.
Points against Bitcoin Investment and Dealing in Bitcoin
And now some news items and developments which advice against the investment and even dealing in Bitcoins or other types of cryptocurrency
Unprecedented Craze and Phenomenal Price Levels without any fundamentals
The prices of many crypto currencies have multiplied several times this year. However, these Virtual Currencies don’t have any intrinsic value and are not backed by any kind of assets. Therefore, the price of these crypto currencies is entirely a matter of mere speculation resulting in spurt and volatility in their price.
Lack of approval and support from Governments and Regulatory Authorities
- In the first week of January 2018, the Government of India issued a warning against investing in cryptocurrency. The Reserve Bank of India (RBI) had already issued similar warnings in the second half of 2017, advising Indian investors to stay away from the dealing in digital currency.
- The amazing rise in the craze for buying drew the attention of media and various regulatory bodies globally. This led to the statement by Indian Finance Minister Mr. Arun Jaitley that India does not recognise cryptocurrency as legal tender.
- Various Indian regulatory authorities including SEBI, Enforcement Directorate, Income Tax Department and RBI have turned their attention to the transactions in cryptocurrencies. If punitive actions are taken then could result in losses to investors.
- It may be possible that the Government of India bans all crypto exchange markets in the near future. In that case, money invested in digital currencies may become worthless.
- Globally also, governments, regulatory bodies and experts have warned people against jumping on the bandwagon of investing in cryptocurrencies.
- China has completely banned the bitcoin exchanges.
- Korea too has made certain rules about Bitcoin transactions. If Koreans use credit card or net banking to buy cryptocurency at the exchange, they will not be able to do so as there would be no settlement.
High Transactions Fees
The average fee paid to process bitcoin transactions has soared in the recent times. Each bitcoin transaction now costs around $7.00
Inherent Negative Features
- Experts warn about the possible threat of hackers getting hold of your investment in virtual currencies. Recently, South Korean cryptocurrency exchange filed for bankruptcy after it was hacked for the second time, resulting in loss of over USD 70 million,”
- The investors can also lose all the investment if they forget their access details such as password. There is no paperwork and there is no authority. Your whole identity is saved in a cryptogprahic signature/key. In case of loss of password/key, you cannot gain access to your money.
- Similarly, if someone else gets access to your digital wallet, he can run away with all the money.
Now the book of facts is open and you are best person to take the right decision for yourself.
Short Video: Bitcoin Investment Gainful or Painful?
Disclaimer: Neither the author nor the editor are the experts in Bitcoin currency or any other cryprocurrency. The information presented in this article is from secondary sources. Therefore, no guarantee about the accuracy of facts and figures cna be claimed. Readers are advised to do their own research before investing / disinvesting.
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