4 reasons NOT to buy Bitcoin – coin news
Bitcoin has been a hot commodity lately without a doubt. People will jump into anything that can bring instant wealth. Unfortunately, the catastrophic collapse in May 2021 came as a shock. It’s a clear warning to be even more cautious about investing in crypto.
“You shouldn’t be investing in things you don’t understand,” said Jerry Brito, executive director of the nonprofit research and advocacy group CoinCenter. It can be hard to resist the lure of making big bucks, but there are reasons not to buy Bitcoin if you don’t want to lose money.
Reasons NOT to Buy Bitcoin – Price Volatility
The number one problem for Bitcoin is price volatility. The most recent drop reflects the major crypto crash of 2018, when the price fell below $ 4,000, or more than 81%, from its high of $ 20,000 in late 2017. As of 2017. On June 28, 2021, Bitcoin is trading at $ 34,434.34. That’s 46% below its high of $ 63,506.36 on April 13, 2021.
Reasons NOT to Buy Bitcoin – There is no basis for an informed decision
In contrast to stock trading, there are no financial statements, balance sheets or operating results to study or analyze. You can only hope that someone will buy your bitcoin for more than you paid for it. If not, prepare to hold the digital currency over a number of price cycles and sell it when the time is appropriate.
Reasons NOT to Buy Bitcoin – Security Concerns
You can easily lose your investment because hackers lurk in exchanges to steal crypto. Cryptocurrency security experts advise against holding digital currency stocks on digital currency exchanges.
Some investors mistakenly enter the security code stored on smartphones or written on paper. Since blockchain technology is a secure system, it is very unlikely and impossible to get your investment back if you lose your private key.
Reasons NOT to buy Bitcoin – No investor protection
The concerns of governments and central banks about Bitcoin are the decentralized structure and the lack of investor protection. In the US, the Treasury Department is concerned about the lack of investor protection and the risk of tax evasion. So expect stricter regulations, including reporting transactions of $ 10,000 or more to the IRS.
In addition to shutting down mining operations, China has banned financial institutions from offering crypto-related services. The tough crackdown by governments is likely to lower the price of Bitcoin a little further.
Despite certain limitations, Bitcoin and cryptocurrencies in general are still popular and growing rapidly. In particular, its positive aspects have also become a hotly debated topic.
In the midst of the epidemic, when a lot of new money was pouring into support to solve the immediate crisis, the US dollar depreciated. Inflation has increased in many countries, leading many people to no longer trust the centralized monetary and financial system.
They flocked due to the scarcity of BTC as well as its potential for cryptocurrencies when it was not governed and controlled by any agency.
Even so, not everyone is sober and knowledgeable enough to view cryptocurrencies as a long-term asset to be held. It’s the uncontrolled sell-off for fear of currency slips and unfriendly influences from the authorities in countries that have increasingly pushed the top market cap coins like BTC into the market.
However, while there have been certain green spots in the past, it will take a long time for Bitcoin to fully recover as it once was.
Whether or not you should buy Bitcoin is up to you. In fact, there are still many billionaires and leading companies in the world who own large amounts of Bitcoin. And of course they know the market situation and have a solid knowledge of investments and cryptocurrencies.
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Important NOTE: All content on the website is for informational purposes only and does not constitute investment advice. Your money, the choice is yours.