Crypto Currency/Bitcoin: A Good option to invest or bad option | Best MBA course in Bangalore

Posted by Dr.K.Venkateswarlu On 04/07/2022 11:25:57

A collective insanity has sprouted around Bitcoin over the last decade. It's hard to predict whether this Cryptocurrency will become the global reserve currency or a store of value as widely accepted as gold. The thrill of riches or ruin leaves some investors wary, but others want to chase the chance for massive profits from investing in Bitcoin. Bitcoin is certainly a revolutionary technology, and it's much less risky in 2022 than it was in 2012. After becoming legal tender in 2021, other countries will look to copy this move to attract innovation, while others may ban it entirely in an attempt to save their fiat currency. Bitcoin has taken center stage in the global geopolitical climate,  and 2022 looks like it may be the year of massive adoption. 

The cryptocurrency market is a highly volatile market as a result, the value of cryptocurrency rises and falls quickly and aggressively, many times a day. In this regard, a person can either make a huge profit or lose everything and stay with nothing in one millisecond. Therefore, the decision to invest in cryptocurrency is made by each person individually. It all depends on one's risk appetite that requires nerves of steel and iron stamina. Individuals who are afraid to take a risk avoid investments with high volatility because they are more concerned about the stability and preservation of their wealth. It is a double-edged sword: it has the potential to generate decent profits, but each participant also faces a high risk of losing a significant share of capital.

Investing in Bitcoin is Risky? 

Bitcoin obviously carries risk. Since its inception, Bitcoin was the 1st digital asset to beget the current ecosystem of crypto. For quite a while, it grew an underground following of investors who saw its future as a possible replacement for the physical monetary system. As the traditional finance world realizes Bitcoin’s potential for disruption, they must choose either to adopt cryptocurrencies 

or face irrelevance. The personal decision to invest in Bitcoin comes down to your appetite for risk and your perspective on the future of humanity.  Best MBA course in Bangalore

There are various reasons for Risk investing in Bitcoin and Reasons for the Price Drop  

  • Environmental sustainability cites its high carbon footprint and the high amount of energy that the mining process consumes. 
  • Regulation in many countries brutal crackdown on crypto trading and mining acted as a  significant catalyst for Bit coin’s slip. It pulled the currency to its lower end of below  $30,000 for a brief period. 
  • The influx of institutional investments Big institutions like Micro Strategy, Square Inc,  Tesla etc., already hold a certain percentage of their assets in Bitcoin. Recently, Michael  Saylor, the CEO of micro Strategy, announced the buying of 13,005 Bitcoin for $489  million in cash. The company now holds more than 1,05,000 bitcoins acquired at a total cost of $2.74 billion. 
  • Some argue that the limit in Bitcoins supply cap makes it a safe hedge against the rising inflation of the global economy. 
  • All it takes is five minutes on the internet to know not everyone has your best interests at heart. Scammers will stop at nothing to get access to your personal information and passwords even your bank account. 
  • Cryptocurrency makes it that much easier for them to target people like you. In fact, the  Federal Trade Commission (FTC) reported that nearly 7,000 people reported losses of more than $80 million on Cryptocurrency scams since October 2021. 
  • Trading in Cryptocurrency is kind of like gambling. Because it’s exchanged person-to-person without any real regulations, there’s no pattern to the rise and fall of its value. You can’t figure out the changes or calculate returns as you can with growth stock mutual funds. There just isn’t enough data, or enough credibility, to create a long-term investing  

Where to Invest in Bitcoin 

Bitcoin is available from a multitude of centralized Cryptocurrency exchanges. The safest exchanges are U.S. based, which also means you'll need to comply with the SEC's know 

your customer (KYC) guidelines. For tax purposes, making an exchange account will require inputting your personal information including your address and social security number. Top Ranked MBA college in Bangalore? 

 

Is Bitcoin the Future? 

With institutions adding Bitcoin to their balance sheets and El Salvador officially making  Bitcoin legal tender, it's looking like Bitcoin will be the future of currency, or at least an accepted store of value. However, with so much volatility in the market, risk-averse investors are still hesitant to buy Bitcoin, much less any other Cryptocurrency. 

Bitcoin's monetary policy is set by the parameters of the code. With governments printing out more money than ever before in light of the pandemic, investors are looking for alternative investments to hedge against inflation. Many are turning to Bitcoin to do so,  facilitating the adoption of Cryptocurrency over the long term. 

Is Bitcoin a good investment? It can be, so long as you do your research and invest  wisely. Investors might, however, turn Bitcoin into a bad investment if they try to treat it like any other asset.

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