The amazing performances of Bitcoin since 2010 have left many investors wishing they had gotten involved and others wondering if they should. The cyber currency performance has been nothing short of astounding, reaching around $20 000 in 2017 before crashing to $3 000 in 2018. At the end of 2020, Bitcoin found a new record just below $30 000 leaving some big questions.

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 buying. Bitcoin is very technical and takes a lot to get your head around. As it is a new concept to most and needs a lot of research before getting involved. One big question is, “How much is 1 Bitcoin actually worth?”. In 2017 the market thought $20 000 and then decided on $3 000 in 2018. So now the market thinks a bitcoin is worth $30 000?
If you think Bitcoin will increase as it has in the past
The outstanding past returns have no guarantee of continuing as past performance is not a predictor of the future. Sure there are many reasons given to buy Bitcoin, however, you need to understand that markets do not go up in straight lines. In fact from these levels the probability of this bubble bursting is huge.

If you use funds you cannot afford to lose
As 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. A value in a wallet with huge swings up and down in value somewhere in cyberspace. If you are using ‘must have money’ which you can ill afford to lose you are asking for trouble. If you are using debt to bet you are in even bigger trouble.
Whilst Bitcoin is less conventional, conventional wisdom still applies. If it sounds too good to be true then it probably is. So be very aware and don’t allow your FOMO to take over. If in doubt, push out…..