Before you decide to invest in bitcoin, there are a couple of questions which you must ask yourself. Are your capital and returns safe? In times of crisis, will you be able to liquidate your money? If all of these answers are yes, then you are good to invest your money in them. However, if the latter is not true, you need to ignore that idea. All of the above questions may not answer all your questions concerning investing in bitcoins. However, if your returns are guaranteed, it is okay to go ahead. Here are some reasons why you should not invest in bitcoin.
You can only purchase stocks in a company which guarantees the growth of your investment to be directly proportional to the growth of the business. This principle fails to apply to bitcoin investment because its price is entirely dependent on demand and supply. Moreover, speculation is what is driving the value of bitcoin currently. Only 21 million bitcoins were created. Therefore, its supply is not only limited but also decentralized. Its price tends to shift with the political or economic factors of a country.
Majority of bitcoin buyers are not buying it for the sole purpose of investment but because of the speculations that are going around. Most of the purchasers have no intention of using them to purchase anything. However, those who are ready to use them have limited options. Very few enterprises allow the use of bitcoins to make a purchase. This situation is not out of hand because the numbers of such companies are on a steady rise.There might be no value in bitcoin
Blockchain and a number of algorithms are behind the technology used to create bitcoins. This means that other crypto-currencies can replicate them. In fact, the replica of bitcoins may be a more accessible version of the latter. The volume in which people are trading this currency has even caused transaction delays. Besides this, the interests of sending the currency are skyrocketing to a point where its value could be significantly lower or higher than when you send the currency. Nevertheless, a greater percentage of the “investors” are not buying into the value of the technology but instead the hype that comes with it. Others are even gambling thinking that they are investing.
Bitcoin Company will guarantee you of the security of your money in their wallet, but they are after winning your trust. They are not sure that their transactions are end to end encrypted and are prone to hacking. A few months ago, there were cases of several companies being hacked. No central governing body watches and regulates the crypto-currency market.