Aug 25, · Today we discuss why Im not buying Bitcoin or cryptocurrencies in general despite them being so Hot! * My Stock Market Investing Strategy link! Feb 18, · Volatility is perhaps the No. 1 reason I won't buy bitcoin as a store of value, or a substitute for gold and silver as many have suggested. The volatility is Author: Matthew Frankel, CFP. Jan 25, · Bitcoin is a currency, not a company. So there are no cash flows to analyze or financial reports to review when deciding to invest. That's one of the reasons it's more risky than buying a .
Why im not buying bitcoinWhy I Won't Buy Bitcoin | The Motley Fool
Since bitcoin is a "universal currency," it would seem to make sense to store the money in bitcoin until I leave. Why would I want to take that much of a risk with money that I'll need? There are some online retailers that accept bitcoin, and a select few brick-and-mortar businesses that do, but for the most part, you really can't use bitcoin in too many places.
In fact, bitcoin's acceptance hasn't significantly improved in years, even with its surge in popularity. This is certainly due to some of the other challenges I've discussed, such as high volatility, transaction fees, and long transaction processing times. In addition, the reality is that most merchants simply don't understand bitcoin and don't really have a desire to -- not yet, anyway. The most compelling reason I won't buy bitcoin anymore is that it's not the only cryptocurrency in town, nor is it the best by many measure.
When I bought my first bitcoin in , it was the only cryptocurrency. Now there are more than 1, And many of the alternatives solve bitcoin's biggest problems. Ripple , for example, has lightning-fast processing times and costs pennies per transaction. And it has gained real-world traction with major financial institutions. In full disclosure, I currently own small positions in Ethereum and Litecoin, two alternative cryptocurrencies.
There are simply too many alternatives that could potentially steal bitcoin's thunder to justify such a lofty valuation. Simply put, bitcoin made more sense to me as a speculative investment, when the entire market cap was just a few billion dollars. The risks involved were more justifiable, given the reward potential when bitcoin was trading for just a few hundred dollars.
Now, that's simply not the case. Bitcoin's risk-reward profile just doesn't make sense to me anymore as a long-term investor. Investing Best Accounts. Stock Market Basics. Some of the most notable ones are the following:. Since the Bitcoin network is not controlled by a central entity, transactions on the blockchain cannot be stopped or rolled back.
This makes Bitcoin possibly the most uncensorable money and digital currency in the world. This is very powerful for a variety of reasons, but most importantly it enables people to protect their wealth from authoritarian regimes and it enables truly open commerce. Therefore, what some citizens have decided to do is to store their value in Bitcoin. They can now also easily use that Bitcoin to buy goods and to quickly send it to friends or family abroad if necessary.
Many supporters believe that Bitcoin will not only become digital Gold, but that it will in fact eventually kill-off and substitute fiat currencies like the US Dollar, to become the world currency.
Enter Lightning Network LN. LN is a Layer 2 scaling solution for Bitcoin, meaning that transactions are not going through the main blockchain but through sidechains. This makes individual transactions a lot cheaper and throughput seemingly ceilingless. The main limitation of LN is that it can only process as many transactions as many Bitcoins are locked in the network in the form of a channel.
That being said, the growth of the network capacity has been remarkable and shows no signs of stopping anytime soon. With scalability solved, Bitcoin now has what it takes to truly become a global form of money, which leads us to the next point. Aside from thousands of merchants accepting Bitcoin worldwide, an interesting trend to watch is one of citizens in third world countries adopting Bitcoin to protect their wealth. As can be observed in the chart above, the trading volume of Bitcoin in Venezuela has gone through the roof.
This is a clear sign of people adopting Bitcoin as a new currency when their national currency has failed. Finally, big investors all around the world are starting to get increasingly interested in Bitcoin. Many speculate that this is not only due to quickly growing adoption but mainly due to global economic uncertainty and fear due to the outlandish amount of debt that is the foundation of the fiat money system.
Large institutions, like Fidelity, Nasdaq, and JP Morgan have all publicly announced that they are buying Bitcoin or that they are building bitcoin-related products for their millions of clients. However, this is likely just the tip of the iceberg.
It is very probable that dozens of additional institutions and possibly even Governments are also working behind the scenes on Bitcoin infrastructure but have not announced so to the public yet. Is it safe to buy Bitcoin? Absolutely not, and everyone telling you otherwise should probably not be trusted. Bitcoin is still a very young digital currency, and also a new highly volatile asset. Furthermore, Bitcoin is still largely an experiment and you should treat it as such.
You should never invest in Bitcoin more money than what you can afford to lose. Due to the speculative nature of Bitcoin, even mere rumors like a country potentially regulating Bitcoin can already cause a significant price drop and deep losses for investors. Bitcoin is a network, and hence unlike Gold, its existence could potentially be threatened by a single bad actor. If Bitcoin mining continues becoming more centralized, the risk of a network attack may become greater as Bitcoin starts threatening the currencies of major Governments.
On the flip side, if Bitcoin mining were to become more decentralized, the bigger Bitcoin becomes the stronger the blockchain gets. This would make a successful attack a lot more challenging.
We have seen over and over again that the first version of a technology is often not the one that ends up sticking around forever.
This has been the case with mobile phones, cameras, and even social networks. Fact is, there is a very little precedent on this and therefore this point might indeed hold true. Bitcoin is built on a deflationary model, meaning that the value of money increases over time. This is a strong contrast to the fiat money system, which through inflation is designed in a way that money loses its value.
There are two main schools of economics that explore these two economic models: Austrian economics and Keynesian economics.
Austrian economists believe that the world needs a deflationary monetary system to flourish, while on the other hand, Keynesian economists believe that inflation and debt are necessary to encourage economic growth.
As stated earlier, once Bitcoin grows to a certain size where it starts to threaten major fiat currencies, Governments may take coordinated action to shut Bitcoin down. One approach would be to illegalize Bitcoin exchanges and hence prevent investors from buying it.
They might even go as far as legalizing Bitcoin and making anyone holding coins legally liable. Something similar has already happened back in when the US Government made it illegal to hold gold , and confiscated this precious metal from its citizens. That being said, unlike Gold, Bitcoin is not a physical asset that can easily be identified by the Government.
An individual could simply memorize the private keys to his coins, or even send them to friends or family abroad with just the click of a button. Therefore, such an endeavor could only be successful if coordinated on a global scale. Abc Large. Despite the rally in prices, many experts are not convinced that cryptocurrencies are the future.
Pethe started small. He was unable to execute the sell order smoothly. While this incident prompted Pethe to sell his bitcoin stash immediately and vow to steer clear of such investments in the future, cryptocurrency exchanges claim that around 2, new users in India are entering the market every day.
But the number of investors is still growing, which is a concern. Please beware there are many fake cryptocurrrency investment platforms out there, I got scammed twice before I met a genius hacker who helped retrieve my bitcoin.
The whole plan was so smooth I could not doubt it. I invested 15BTC on a particular website called FoxBtc, I monitored the profit yielding but got locked out of the account before I could withdraw.
I went online and met this recovery expert at recoverywealthnow on google mail who helped me retrieve my bitcoins back in few hours. He saved my life , he can save yours. Faruk Ahmed days ago. Many people have no knowledge about cryptocurrency. After read this article, I think it will help a lot who wanted to know about cryptocurrency.
Thanks for this. Patrick bartley days ago. Google search; CoinShield limited concerning the trade system.