Since the spring, the value of Bitcoin has increased fourfold — and you thought the stock market surge in the DOW was a big news. Is it time to bring your money into Bitcoin now? Here’s why and why you shouldn’t.
Of course Bitcoin is a cryptocurrency focused on blockchain. It is global, anonymous and decentralized.
Bitcoin recently made big headlines when its Bitcoin exchange price (which allows you to trade Bitcoin for US dollars) rose to an all-time high above $4,000. That was about a four-fold improvement from the valuation of Bitcoin only a few months earlier, and about seven times what a year earlier at this time Bitcoin was worth.
That sure beats the DOW’s recent record of 22,000-point. If, in April 2017, you had $1,000 invested in stocks, you would now have something like $1,040. Nonetheless, if you had $1,000 in Bitcoin back in April, today it’s worth about $4,000.
Which begs the question: Why should you invest in bitcoin?
Here are three reasons why Bitcoin could be a great investment today:
1. Bitcoin is good for Instability. Political instability is typically not good for the stock market — whose worth is tied to existing companies that rely on government resources, stable financial institutions, a healthy workforce, and so forth. Unrest is good for Bitcoin, though, which is resilient to political unrest because it isn’t a currency backed by the government. There’s proof that recent unrest in Asia contributed to the Bitcoin price surge. If you believe the future holds more uncertainty for governments and conventional banks, then you can consider Bitcoin a convincing investment.
2. It’s simple and easy. Investing in Bitcoin is as simple as buying Bitcoin on an online exchange in the hope of taking advantage of future price increases. Bitcoin purchases are subject to a limited amount of regulatory oversights, rendering transfers fast and headache free.
3. It’s low cost. Exchange costs for Bitcoin are nominal — usually of the range of 0.2 per cent of the exchange value. For contrast, when you use a credit card to purchase something in foreign currencies, U.S. banks typically charge around 3 per cent in fees. Bitcoin offers a cost-effective way to do it, if you want to speculate on currency.
Would you consider investing in Bitcoin?
Opinions expressed by AsianBlurb contributors are their own.
