A lot of aspects of the economy have been affected by the coronavirus pandemic. It pushed many businesses to close and forced most employees to refrain from working. But, one investment that remains working even during the quarantine is Bitcoin.
Even though investing in Bitcoin is a trend and encouraged by a lot of individuals around the world, some experts do not recommend anyone to invest in the said cryptocurrency. This is because of several reasons.
Are you planning to invest your real money in Bitcoin or any other form of cryptocurrency? Well, you should think again. In this post, we will provide you with the different reasons you should take into consideration whether or not investing in Bitcoin is a good choice.
So, if you want to know more about it, then keep reading!
A lot of reasons are associated with Bitcoin’s outperformance. Some individuals think that the lack of bitcoins in the ledger is one of the reasons behind it. According to its creator, Satoshi Nakamoto, only 21 million bitcoins are possible to get mined by the miners. Considering this situation, the scarcity level forces the increase in value of each token. You can start investing in bitcoins using the bitcoin trader app.
Buying Bitcoin Could Be a Wrong Move
Even though Bitcoin offers a lot of potential to its investors, especially this year, a lot of experts still think that buying bitcoin is a wrong move. This is because of the following reasons.
Bitcoin Is Not Actually Scarce
First, bitcoin is not actually scarce. Many people think that it is because it is what the programming says. On the other hand, physical metals, including gold that one can get in the physical world, are truly limited. But the Bitcoin tokens are also scarce by computer programming. The overwhelming support given by the community has pushed the programmers to limit the value of bitcoin in the future. Therefore, bitcoin has been perceived by many as limited while it is not.
There Is a Low Barrier to Entry
First-time users enjoy the benefits offered by Bitcoin. But keep in mind that the barrier enabling people to be part of the crypto world is low. One can enter the blockchain through enough coding knowledge and spending a low amount of time. As mentioned, blockchain is a decentralized and digital ledger of the said network that monitors every transaction being done. Bitcoin does not have a special aspect behind their blockchain that other physical establishments could not one-up.
It Has a Utility Problem
Even the highest position in the world of cryptocurrency also experiences a utility problem. During the time of writing, there is a total of 18.51 million bitcoins that are circulating in the digital world, with approximately 40 percent of its whole mined by a small group of miners. Even though there is fractional token ownership in the crypto space, less than 11 million bitcoins won’t go too far. For the sake of arguing, in 2017, the gross domestic product reached 81 trillion US dollars. On the other hand, in the world of cryptos, approximately 125 billion bitcoins are circulating in the digital space without being managed by an investor. In this case, a minimal utility is present.
Conclusion
Although Bitcoin offers a wide array of benefits to its users, it is still important to keep in mind the possible threats you may experience in investing in this form of cryptocurrency. If you are planning to invest your real money in Bitcoin, make sure to weigh its pros and cons, as your money is at stake. Think about the things you are not sure thoroughly.
