During the last quarter of 2018, the price of Bitcoin fell significantly. The crypto-money went from $6500 in November to $3000 in December, a drop of more than 50% of the initial value. However, history has shown us that the Bitcoin market recovers naturally according to supply and demand. According to well-informed sources, the price of Bitcoin could reach $50,000 during 2019. The question is: should we really invest or not? In this article, Franck Peltier tries to give us the right answer to this question.
What is Bitcoin?
Bitcoin can be defined as an electronic currency that was created in 2011. It is a new means of online exchange, just like the dollar or the euro, except that it is not regulated by any government, bank or individual. These features attract investors as much as they worry, since it is difficult to predict the gains or risks associated with Bitcoin.
The Risks of Bitcoin
Although Bitcoin has several qualities, for Franck Peltier, particular attention must be paid to the risks associated with this electronic currency. In order to fully understand how it works, it is essential to understand the risks of Bitcoin:
Risk of capital loss: it’s no secret that the value of Bitcoin depends on variations in supply and demand. Any investment in this currency includes the possibility of suddenly going from $30,000 to $3,000 or even $300, so if you are not willing to take the risk, this investment is not for you.
Operational risk: Anyone exchanging crypto-currencies on a regular basis, could know that error screens, bugs, 502 errors are displayed a lot in times of high tension. This makes it quite difficult to sell or buy large amounts of Bitcoin. These are recurring operational issues that should be expected if one wants to invest in Bitcoin.
Risk of obsolescence: you probably remember MySpace, which was one of the very first social networks in 2004, the platform ranked among the top 5 most used sites worldwide, unfortunately a few years later, Facebook came to dominate the social networking trail and chase MySpace away once and for all. The moral to remember: with technical and technological progress, the risk of obsolescence remains very likely. Since Bitcoin is considered a new technology, it is important to handle it with caution.
To invest or not to invest?
Should we buy Bitcoin or not? The best solution, according to Franck Peltier, is to devote a fairly small part of your capital to investing in Bitcoin, this will allow you to take a chance and avoid the feeling of having lost too much money.
