Whenever an investment becomes as hot as Bitcoin has in 2017, it is normal to see late investors hop in looking to make a quick dollar. Sometimes they hit it big. Other times they burn out. Bitcoin has had a massive 2017 and there are strong indications it might end up multiplying over 9 times its value from the beginning of this year if it continues to chart like it has. Obviously no one can know for sure. It is noted that crypto currency is highly speculative, and at these levels, financial analysts highly disagree with where it will go. Warren Buffet, the famous wall street investor, wouldn’t touch the cryptocurrency space and still hasn’t to this day. Others strongly think we could see bitcoin hit $100,000 by the end of 2019.
If you are taking the plunge into Bitcoin at this stage, it is very important t know that this is not ordinary money. Bitcoin has its own specific characteristics that differ greatly from normal currency or stock investments. Before you take the step to invest in anything, it is very important you know your stuff so that you can make an educated choice . Here are 3 key things to note when buying Bitcoin:
Bitcoin is owned by No One, Bitcoin is owned by Everyone
One of the first things to note when deciding whether or not to buy Bitcoin is that Bitcoin has no signle owner or proprietary entity. It is not owned by any government or company, rather it is governed by the sum of the users on its network. Bitcoin is a completely decentralized virtual currency and is not backed by any legal framework as of yet. And as such any loss you incur will be at your own risk. There is no backing authority to hold responsible for loses if they unfortunately occur. Several hacks of bitcoin networks have left investors high and dry. Learn more about reliable Exchanges here.
Bank at Owner’s Risk
Once you buy Bitcoin and store in your own wallet, its safety is completely your responsibility. No commercial bank will accept it to safeguard for you, at least not yet. We have seen some Asian banks take stock in digital investments like Bitcoin and Ripple, but many have pulled out due to volatility.
Much like hiding money under a mattress digitally, Bitcoin’s strength is that it is not regulated by any bank or central agency. If it’s in your hands, you get to keep it safe. It’s weakness is that it is also not regulated by any bank or central agency, so you can’t license someone to keep it safe for you.
In addition, once a Bitcoin transaction is initiated, it cannot be reversed. As such, keeping your Bitcoin wallet absolutely secure cannot be overemphasized. Keeping your Bitcoin safe is completely at your risk therefore it is critical that you take every safety measure to make sure that your wallet is not compromised, or it might be exposed to be stolen by a growing number sophisticated Bitcoin thieves.
We plan on covering more on how to keep your Bitcoin wallet safe. The rise in hack attempts has risen in tandem with the increased number of investors and value in Bitcoin.
Bitcoin is not like your typical stocks, precious metals or oil. These other investments posses predictability in their charting and are considered less risky. Once Bitcoin hits Robinhood, it is likely that it will be labeled as highly volatile. This is because it can swing tens of percentage points up or down within the span of a few hours.
Many issues can make the price of Bitcoin Jitter. Chief among them is when news of a crackdown or restriction filters through from one of its major markets. Recently we saw Bitcoin drop with the increased speculation of bans in Asian countries, including South Korea and Japan. Within a few hours, a bitcoin went from being worth north of $20,000 to playing with it’s support line at $10,000. With this considered though, Bitcoin has showed incredible resilience as a coin. We think this is mainly due to its core believers, the HODLRS.
Even China closed its largest cryptocurrency exchanges. The entire marketplace, bitcoin or otherwise, took a steep dive. To date, one must take note that Bitcoin has always managed to rise back even stronger whenever it goes through such trying periods. Do your research, but if you’re ballin enough and have a spare $50,000 to buy Bitcoin, look at your options. Ot might be worth playing the swing down to $10,000 on bad regulation news. Who knows how long that play will last though?