Bitcoin, the main cryptocurrency, has increased drastically in value. The question is should you invest or not?
The value of Bitcoin has risen exponentially since the beginning of 2017, but will it maintain that increase, or fall soon?
Bitcoin, of course, is the cryptocurrency that is private, decentralized and available worldwide.
It became one the most popular news subjects when the price on exchanges for U.S dollars rose to an all-time-high above $4,000. That is about a 400% increase in value, from a few months ago, and a 700% increase from a little over a year ago.
So, is now the time to invest?
Reasons to Invest in Bitcoin
Unpredictability is good for Bitcoin. Instability isn’t remarkable for the stock market, due to the fact the value is based on companies that depend upon government stability and reliable economic structures. However, unrest is useful for Bitcoin, which is resilient to political instability as it is not a government-subsidized currency. There is even evidence that current unrest in Asia contributed to the Bitcoin rate increase. So if you believe the future holds more uncertainty for governments and financial institutions, Bitcoin may be the investment you are looking for.
It’s simple. Investing in Bitcoin in order to take advantage of future price increases is as easy as purchasing Bitcoin on an internet exchange. The transactions are controlled by limited regulatory oversights, which produces the fastest and simplest transactions possible.
It’s inexpensive. The costs for Bitcoin exchanges are minimal, normally around 0.2% of the value of transaction. In contrast, U.S banks normally charge around 3% in fees when purchasing things with your credit card in foreign currency. If you travel or use foreign currency often, Bitcoin offers a great low-cost option.
Why Not to Invest in Bitcoin
But, while Bitcoin may seem like the easiest investment, here are some reasons it may not be what you want.
Design problems. While the popularity of bitcoin has risen incredibly, it is still prone to design issues. For example, late last year Bitcoin exchange speeds decreased due to an issue in the manner that Bitcoin blockchain works. The problem, unlike some analysts predicted, did not produce a monumental crisis for Bitcoin. The issue has now been mostly solved through something called SegWit. That being said, this issue is evidence that a new or worse problem could find its way into the future of Bitcoin.
Cryptocurrency Competition. Bitcoin is not the one and only blockchain-based cryptocurrency in the market. There are many different options including Ethereum, Litecoin, and many others. Bitcoin leads in the cryptocurrency market, most likely due to the fact it was the first option. Because of this, there is no promise that Bitcoin will maintain its leading position.
Bitcoin popularity. Bitcoin’s intense value increase over the past year is primarily due to the fact that relatively few people owned Bitcoin before its popularity. Now, because of its valuable success many people are noticing and purchasing Bitcoin. What this means is that the people who purchase Bitcoin nowadays are not entering in the first stage. Bitcoin’s increase may additionally hold for a long term to come, but it will no longer be at the extraordinary costs of this past year.