The common question everyone asks is, Why is an investment in Bitcoins risky? Yes, when you invest in Bitcoin there are risks.
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Why is an investment in Bitcoins risky?
Investing in Bitcoin, Ethereum, Litecoin, Ripple, EOS or any other digital currency has its risks. Before you invest in the market, you should investigate because every investment has risks, every business has risks.
Let’s consider some factors. Everything in life is a risk, no matter what you do, the most important thing is that you always take calculated risks.
For example, when you enter college and you or your parents invest with four or five years paying a high semester or monthly fee, this is not a guarantee of success, this is not a guarantee that you will be a good professional in the chosen area until you find a job in this area.
This is a calculated risk that you make with the perspectives and predictions of what will happen in four or five years, but in five years a lot can happen when you start a business.
For example, you invest money in the hope of harvesting fruit and for reasons you didn’t calculate or predict, the business didn’t progress.
Do you know how many businesses open and close with less than a year to live? There are many. When you make an investment it is more or less as the return on investment is directly related to the level of difficulty you are willing to take before you start.
You need to calculate and decide which investment best fits your profile, that is, you need to decide how much risk you are willing to take with your savings.
For example, imagine the simplest investment with a guaranteed return like having an apartment, but now imagine that you live in a time when your government forced you to sell that property.
At the time you had just sold the apartment, you had all the money in your savings.
It is a risk that was not calculated, it is actually a very unlikely risk but it existed and no one imagined that such a risk exists today.
Bitcoin risks: Constant fluctuations
Investments of higher capital have a constant fluctuation and even the best experts lose money at certain times.
The same is true for currency investments, as the dollar and others buy and hold in the hope of a possible increase in value in order to make a profit or even to hold more secure capital, as the dollar has also recently been in small fluctuations.
The big problem with investing in currencies like the dollar or the euro is that these currencies are directly linked to changes in economic values.
These values are easily influenced by any economic or political crisis.
Since the cryptocurrencies, or Bitcoin, are global and decentralized, this means that they are not directly influenced by economic and political events.
Read also: Investing in Bitcoin: Is It Safe? Understand the Risks
Of course, there can be an influence yes, but not with an influence suffered by that of currencies that have variations.
If we compare Bitcoin to the dollar, Bitcoin is worth $11,500 today, having peaked about a year ago at $20,000.
Of course, there are fluctuations and the price tends to go up and down constantly, but there’s no doubt that according to all the experts and considering its market capitalization today, it will most likely have that $20,000 peak again.
We can conclude that investing can be advantageous, but, of course, there is a risk mainly because of the way this investment was made.
The return can be considerably high, so if you are going to make investments between currencies like Bitcoin or any other asset, you always have to take into account that each investment is a risk at sight.
For this same reason, it is advisable to study and research the market a lot before investing and assuming this type of risk. Investigate, ask, advise well and be constantly alert to any type of risk that may occur.