To purchase or not to purchase cryptocurrency – this is probably the number one question running through the mind of many investors right now. Many people tend to tiptoe around the thought investing in cryptocurrencies. But, with the uncertainties that surround them as far as legality and regulations are concerned, it is only understandable for them to be cautious.
Aside from putting your money in a loose space combined with the possible risks of losing your hard earned money if you become a prey of a ponzi scheme, there are three reasons to not purchase cryptocurrency.
Bitcoin is Tremendously Volatile
Through its history that has spanned for almost a decade, bitcoin has become susceptible to alarming crashes. For instance, back in 2013, the currency went as high up as more than $1,100 only to plummet to $700 after several months. It then bottomed out to around $200 during early 2015. Of course, there is simply no reason for it not to happen again.
Whilst investors may feel tempted by $2,000 bitcoin, they should be ready to kick themselves if ever it goes back down at $2,000 or much lower after a few months. It goes double for the rest of the alt-currencies, or those digital currencies people sometimes purchase as an alternative bitcoin investment.
Core Users of Bitcoin are Sadly Fringe Figures and Criminals
For many years, several stores have accepted bitcoin as payment together with credit cards and cash. But, in spite of the promises of some believers of bitcoin being a cash replacement one day, there is still no evidence that it will happen any time soon.
The truth is that bitcoin is rather slow as compared to debit or visa cards, not to mention the rising transaction fees. These days, you can pay the fee then wait for 10 minutes before the bitcoin transaction clears, or you can just swipe your credit card for instant payment and a cash reward.
Due to these limitations, the core use of bitcoin remains what it has been for the longest time – paying for extortion fees online or worse, for drugs.
Meanwhile, ordinary consumers don’t use this as a method of payment. It doesn’t mean that it is not a valuable investment. It’s just that in the actual world, it has lesser use than gold itself.
Bitcoin Exclusively Exists on Computers
It may sound a bit obvious but as a monetary form, bitcoin might still be the most vague stuff history has ever seen. Even securities or paper money can be presented to a company or central bank with the hopes that someone is going to redeem them. This might not be possible with bitcoin. Cryptocurrency is merely a piece of code online and you cannot ask any company or country to honor it.
Cryptocurrency may seem like an enticing investment but with all the uncertainties surrounding it, there is simple no reason for you to spend your money on it. When it comes to investments, it is always stick with the tested and proven to avoid disappointments and regrets in the end.