Following the pace at which Bitcoin market value keeps rising, it is evident that persons, corporate bodies or organizations venturing into it now are set to reap bountifully in subsequent time.
Due to the economic hassles here and there, a lot of people, especially young people, have seen the importance of investments and how it is gradually becoming beneficial to not just individuals but sectors, organizations and countries. They now see it as an escape route from poverty, hardship and recession and as such, are massively making their way into it.
However, just as in the case of planting, where not all soil types are usually fertile grounds for germination, so it is in making investments. One needs to have sufficient understanding or adequate knowledge of most of these fundamentals as regards investing in Bitcoin or any other kind of cryptocurrency.
People should know that it is usually not just about investing but a case of investing wisely.
Bitcoin Is Like Every Other Investment
Bitcoin has remained the most liquid crypto, and has been attracting high institutional interest, most recently from PayPal, which means that it might just be a matter of time before the crypto asset becomes the number one choice asset for safe haven.
Sarah Bauder Senior Investment Analyst at sophisticatedInvestor.com explains to constituency that with any investment, there can be no unequivocal guarantee of gains, noting that Bitcoin is certainly no exception to this axiom. According to Bauder, one way that Bitcoin will achieve legitimacy in the eyes of more investors is taxation.
She says;
Despite the fact that taxation is contrary to one of the fundamentals principles of what Bitcoin represents, by abiding by regulators, Bitcoin and other cryptos will gain acceptance from more investors, both young and old
David Janczewski cofounder at Coincover also retains the opinion that every investor should have the knowledge that prices are capable of fluctuating over time. This, therefore, should be a big hindrance to the fortune telling of this crypto’s ability to always bring gains to all its investors. Janczewski continues by explaining that no investment can offer a guaranteed win to every investor. Hence, Bitcoin, like any other investment vehicle, should focus on long term gains and be held by people who understand that prices can fluctuate over time.
With this knowledge, one doesn’t hop in shortsightedly. Rather, does so knowing that things are likely to change along the line.
Decline in BTC or Permanent Loss of value?
Janczewski has no objection whatsoever as to if Bitcoin value may change. However, he doesn’t see the possibility of a decline to the point of automatically losing its value. Rather what he sees is the crypto’s growth in years to come.
Janczewski says;
There are always possibilities for the value of Bitcoin to change based on wider external forces. However, one needs to only look at what is happening in 2020. So far, cryptocurrencies have proven to be secure, durable, easy and cheap to transfer from one party to another. So there are obviously high anticipations that the appeal of crypto will grow.
He also notes that Bitcoin receives a great deal of media attention, often as a result of a sudden change in its value. However, as with any investment, the focus should be on long-term returns that factor in peaks and troughs in value, with cryptocurrency as a part of a diversified portfolio.
Conclusively, Janczewski’s advice to persons seeking to invest in cryptocurrency is that investing in cryptocurrency may not be for everyone. He states that there are so many factors one needs to consider when deciding where to invest money, which includes risk appetite and financial goals.
“The best thing to do, if in any doubt, is to speak to a qualified financial adviser who may be able to demonstrate how cryptocurrencies could fit into an investment portfolio.”