Once Bitcoin was a blip on the radar. It emerged in 2009 as a trail-blazing digital currency that was created and held electronically. The purpose was to disrupt the ways we paid for things and exchanged funds.
It seemed as if its biggest proponents were a little ahead of themselves. We are living in an increasingly tech-centric world but the idea of an online currency that was essentially invented out of thin air taking over our financial systems always seemed far-fetched. Many believe it still does.
The question now isn’t whether Bitcoin can supplant conventional currency, but whether it can exist alongside it with enough value to be a worthwhile investment. This is the way more people seem to be looking at Bitcoin. This new outlook begs the bigger question: is investing in this pioneering cryptocurrency a good idea?
For those who might be interested here is a break down of some of the pros and cons.
Pros of Investing in Bitcoin
Bitcoin Is Easy – The first pro is that investing in Bitcoin is actually very simple. The cryptocurrency itself might be a little bit complicated (in terms of how it’s mined, the ins and outs of the blockchain), but buying and selling it is far easier than making a stock trade. That doesn’t have anything to do with whether or not it’s a strategic investment, but if you’re looking for a low maintenance asset, it’s worth your consideration.
The Price Is Strong – Not that you want to buy an asset at its peak value, but Bitcoin performed incredibly well in 2016. The argument has been made that it was the best-performing currency of the year. It dipped a bit at the very beginning of 2017, but the current climate is robust with regard to Bitcoin’s value. This will certainly lead some investors to start looking for the right time to hop on board.
Usage Is Up – It’s generally recommended that you “get to know” any stock or asset you might invest in, which means even if you view Bitcoin primarily as a commodity you might want to check in on its practical usage.
According to one overview of the cryptocurrency’s status, more businesses are accepting it as viable payment. Major online retailers like Amazon and PayPal have been on board for some time now, and more recently we’re starting to see more brick and mortar businesses accepting Bitcoin as well. The impact of all this is tough to quantify, but as long as usage is going up, so should value.
Cons of Investing in Bitcoin
We’ve Seen This Before – Back in 2013, Bitcoin’s value soared to a peak right around what we saw at the end of 2016 before violently crashing in the months to come. There are undoubtedly some who fear that the rocky start to 2017 is a sign of another, similar crash, which may indicate that Bitcoin just doesn’t have staying power at its higher price range. The two scenarios are actually quite different given that 2016’s peak resulted from steady growth over time, whereas 2013’s was more of a sudden, unexpected leap. But it’s understandable why some may be concerned with the trends and history.
Other Alt-Coins Are Worthwhile – Looking through a rundown of predictions for Bitcoin in 2017, it’s worth mentioning that some experts are eyeing alt-coins for growth. An alt-coin is essentially any cryptocurrency that isn’t Bitcoin, and while Bitcoin is far and away the most valuable of the bunch, some of the competitors may be better suited for investment. This is because they have relatively low value but potential to grow in the coming year.
Bitcoin Is Still New – The cryptocurrency market is still developing, and with a great deal of uncertainty. Usage is up and the price is high, but we’re still in the early stages of Bitcoin’s evolution, which just makes for more unpredictability.
Whether or not investing in Bitcoin is a good idea is up to each individual investor to decide. But these are some of the factors that should help you get a grasp on what you’re looking into.
Questions for Discussion: Is Bitcoin something you would invest in? What other pros and cons an you think of?