Like the gold rush in the 18th century, innovation of Bitcoins is getting a new pace. As a Canadian or any other interested investor, you would not wish to be left out in this race. The indicators on the Bitcoin trend are showing a bright future for those who will dip their feet on Bitcoins.
If you have been keen, the price of Bitcoins has been rising each day. At the time of writing this article, 1BTC was worth more than 18.7 thousand dollars. Notably, the price has changed drastically in days not even weeks. Who would not love such a worthy investment?
Even though the Bitcoin investment is a great fortune, it has risks like any other venture. In this regard, before you join the wagon, it is essential to know the risks you might encounter on the journey. Here are the 4 major risks involved in Bitcoin investment:
a) Market price Fluctuations
As Bitcoin prices continue rising, its demand is also going up. Due to this, it is becoming a commodity of public interest. Like any other such products, they are sensitive to news. Any negative news touching on the Bitcoin can lead to a fluctuation in its prices.
For instance, the price of Bitcoins suffered a blow in 2013/2014 period. During the time, a fraudster by the name Mt. Gox hacked the blockchain leading to a big loss to investors. The prices fell from $751 to $285 which was about 62% loss.
Notably, in 2013 and 2014 Bitcoin prices fell by about 61% and 80% in one day respectively. Since the future is uncertain, no one can state with certainty that the Bitcoin prices will continue going up. Hence, even though it is a solid investment, it faces the risk of market price fluctuations.
b) Regulatory risks
If you have some basic information about Bitcoins, you are aware that they are decentralized currencies. Hence, there are no regulators or intermediaries to control their usage. For this reason, drug traffickers, terrorist and other illegal fraudsters can use this cryptocurrency to conduct their black market transactions.
As well, the Bitcoin is a competitor to the legal tenders in various countries. In dealing with these issues, the government and regulatory agencies may enact laws to restrict, regulate or ban usage of Bitcoins. In such, cases the freedom enjoyed by the coin may be hurt. Through this, it is prices may drop leading to a loss on those who had invested in it expecting the opposite.
c) Fraudster risks
Like any other product, high demands inspire criminal activities. Bitcoins are not also an exception. As the price of Bitcoin continues to attract new investors, fraudsters are joining the market and offering false Bitcoin sales.
A good example is the 2013 Bitcoin Ponzi in the US. The impact of this scheme led to a loss of money and a harsh impact on the Bitcoin price in 2013 and 2014. As such, when investing in Bitcoins, it is essential to do due diligence to avoid becoming a fraudster victim.
d) Security risk
As you know, Bitcoin is a digital currency. As such, it is prone to all risks facing any digital platform. Some of these issues include malware, virus, and hacking among others. Also, you store your Bitcoins on your devices such as computers and mobile phone if you lose them, you lose all your coins.
Importantly, for one to steal your Bitcoins they only need your private keys. With it, they can transfer the coins to their pockets. Unfortunately, Bitcoin transactions are irreversible. Hence, when you lose them, they are gone forever.
All in all, by understanding the above risks, it will be easier for you to buy and sell Bitcoins.
You have more reasons to stay away from bitcoins, other cryptocurrencies – Other than investing in an unregulated space and the potential risk of losing your money, you have more reasons to stay away from cryptocurrencies. https://t.co/wLYWFQ6D27
— Real Estate Indore (@IndoreReal) 2 de marzo de 2018