Is Bitcoin Still a Great Investment Today?

Bitcoin had a wild run in 2017 when its price increased from just over $1,000 at the start of the year to a whopping $19,000 by December. This naturally led to an increasing number of people investing in the cryptocurrency. But with its meteoric rise came its immediate tumble, as its price dropped almost immediately afterwards. While Bitcoin is still the world’s leading cryptocurrency in terms of market cap, is it still a good idea to invest in it this year?

All Things Finance previously noted that financial experts have mixed feelings on the topic. Some argue that cryptocurrencies will rebound, while others claim that their downfall is imminent and irreparable.

Bitcoin’s price had lingered around $8,000 last April, before once again steadily increasing. Analysts believe its recent price surge is due to the growing number of institutional investors and the inflow of new capital. As a response, Fundstrat Global Advisors cofounder Tom Lee predicted that Bitcoin will be at $25,000 by the end of 2018, saying, “We still feel pretty confident that Bitcoin is a great risk-reward.”

Cryptocurrency angel investor Tim Draper also has high hopes for Bitcoin, having recently projected that its price will climb to $25,000 by the end of 2022. Draper has made accurate predictions thus far, having correctly forecasted Bitcoin’s price to surpass $10,000 by the end of 2017. This means his words should not be taken lightly by analysts and investors alike.

However, industry figures such as David Siegel still warn against investing in Bitcoin. The Two Sigma cofounder claimed that the influx of investments are part of a larger problem, which is that investors store their money instead of putting it to good use. “I think there’s a little bit too much interest in storing value, and not enough interest in creating new value and expanding the pie.” He went on to say that he has more faith in Bitcoin’s underlying technology, Blockchain, because it has the potential to create new business models in various industries.

Bitcoin’s volatility has also made it a prime target for hackers. Because cryptocurrencies do not have a physical manifestation or central regulation, victims of these cybercriminals have no means of pursuing legal action. Add the fact that these hackers can also remain anonymous, and you can see why others have been wary in investing in the cryptocurrency. As Bitcoin becomes increasingly popular, the risk of being targeted rises for any service that deals in the buying, trading, and selling Bitcoin.

So is Bitcoin still a good investment? The question really lies on whether you plan to make a short-term or long-term investment. If you are simply aiming to make money on cryptocurrencies, then there are opportunities in choosing Bitcoin. Understand that it is highly volatile, which means there are windows to make money with the kind of market fluctuation Bitcoin experiences. Fortunately, there are legally operating exchanges that make short-term trading easier. Some of the newer forms of investment include Nadex’s Bitcoin Spreads give people the option to trade the price of Bitcoin without ever buying or selling cryptocurrencies. This reduces the risk of getting your stored money hacked. However, if you believe in the future of Bitcoin as an everyday currency, then you should make investments armed with the knowledge that the cryptocurrency will ride through numerous fluctuations. In short, Bitcoin investment is not for the faint hearted.

Of course, it’s the duty of any investor — newbie or otherwise — to do their homework or else he or she will be eaten alive. It’s not advisable to simply follow the opinions of a friend, especially when there are so many cryptocurrencies and factors to consider in sight. One must be familiar with blockchain technology and how it is poised to disrupt the world of finance. Just remember that as you dive into cryptocurrency, it’s a good idea to only invest that which you can afford to lose.

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