The amazing performance of Bitcoin since 2010 has left many investors wishing they had got involved and others wandering if they should. The cyber currency has been nothing short of amazing as $1000 dollars invested in 2010 would have returned $90 million in 2017.
Here are 3 reasons why you should not get involved with Bitcoin.
If you don’t understand what Bitcoin is
It’s too easy to get lulled into an investment through hype and speculation taking a chance not clearly understanding what you are doing. Bitcoin is very technical and takes a lot to get your head around. As it is a very new concept it needs a lot of research before getting involved.
If you think Bitcoin will increase as it has in the past
The outstanding return in value has no guarantee of continuing following the principle that past performance is not an indicator of future. Sure there are many reasons given as to why it is a no brainer, however, you need to be astute enough to understand that markets do not go up in straight lines. As more cyber currencies launch (so far there are 876) the market will have more choice and Bitcoin’s dominance could diminish.
If you don’t have funds you can afford to lose
The risks are extremely high. You rely on the speculative bet that all the hype placed on Bitcoin will play out. It defies conventional thinking as there is no tangible asset. Just an amount in a wallet which moves up and down in value in cyberspace. The graph shows how these movements can swing in the short space of one week. So, if you are using must have money which you can ill afford to lose you are asking for trouble.
Whilst Bitcoin is less conventional, the conventional approach still applies. If it sounds too good to be true then it probably is. So be wary and do your home work and find out as much as you can before getting involved.