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Is it safe to invest in Bitcoin? Two important questions every investor needs to ask

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    safe to invest in Bitcoin BTC

    You’ve probably heard a lot about Bitcoin and are now 99% convinced to invest in BTC. But wait, have you asked these two important questions yet?

    Should you invest in bitcoin

    Image Daniels Trading

    Who started Bitcoin? Can you trust them?

    Bitcoin is Satoshi Nakamoto’s brainchild. His identity was never revealed. The concept was backed by around 1000 early public enthusiasts who were probably already very rich even before bitcoin was conceived. At least about 50 of them were known to have a net worth of more than $100 million before they entered the digital currency market.

    A few of them were even billionaires! These individuals are smart, incredibly connected, media savvy, and great at marketing. Most of them are probably in the finance world, with some running large financial institutions. If they weren’t so, they wouldn’t have the ability and the mechanism to push bitcoin to the mainstream.

    Remember that Bitcoin, like all stores of value and collectibles has no cash flow. Its value depends on what others think it ought to be.

    Does Bitcoin have the potential to become a long-term trusted store of value?

    Bitcoin needs to trade around $2,000 a coin in order to become a long-term trusted store of value. This, of course, depends on how many coins are in circulation or are lost.  But as to-date, the valuation is more than 100x the price of Bitcoin.

    If in case bitcoin fails the expectation, its price would most likely approach near zero. This is unless it turns out as a “cool” collectible.

    Bitcoin can be a great investment with a nice return just in case you think it has a 10% chance of becoming a long-term trusted store of value.  Nevertheless, amidst the inherent risk in the system, a professional investor would only consider investing some small portion of their portfolio in this case.

    Is it safe to invest in Bitcoin?

    is it safe to invest in bitcoin

    Bitcoin is extremely risky, even in the best-case scenario. Hence, if you’re considering to invest in Bitcoin, prepare yourself to lose all of it, too.

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