Investments make up approximately one-sixth of the U.S. GDP. These days Bitcoin is one way people are investing their money. Bitcoin is a form of digital currency with a market cap of over $7 billion. The typical investment strategy of buying low and selling high is utilized by traders of this cryptocurrency. Recently, Bitcoin has experience its toughest losses so far; the virtual token fell as much as 8.4%. This is in part due to the many inherent risks of BTC, decreasing the value of this new cryptocurrency.
There are several reasons to explain the phenomenon: first, it doesn’t have enough transaction volume, which makes it not qualified enough to be a currency. Second, it suffered from a series of hacker attacks, one of which caused the trading platform to crash down on June 15th, 2017. Security problem became the biggest concern for investors. Third, the overall technology market experienced a serious downturn during the past few months. Thus, some investment bankers were not optimistic about the future of Bitcoin’s worth. It’s important to remember the number one rule of investing is diversification. So whether or not you think Bitcoin is amazing, don’t put all of your eggs in one basket.
“So buying into Bitcoin has, at least so far, been a good investment. But does that make the experiment a success? Um, no. What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that’s not at all what is happening in Bitcoin.”
—— Paul Krugman
- What are other reasons for the depreciation in Bitcoin’s worth?
- Is there any potential for Bitcoin’s past investment popularity to resurface in the future? Why or why not?
- Would YOU invest in Bitcoin?
By Collette, Kaitlyn, Ruofan