Learn about the different myths and truths about investing in Bitcoin and Cryptocurrencies, so that you can make an informed decision.
Currently there are many cryptocurrencies and they are becoming more popular. However, there are a number of myths about investing in Bitcoin and other currencies of this type that are worth clarifying if you are considering investing your money .
Myths and truths about investing in Bitcoin and Cryptocurrencies
1. Cryptocurrencies have no value
Detractors of digital currencies often say that they have no intrinsic value and that they are not backed by another currency or a precious metal. But the truth is they are exchanged on a daily basis and used as an established currency, so they clearly have a real value determined by the market. The CoinMarketCap site registers more than 5,000 cryptocurrencies with a capitalization that in April 2020 exceeded 224,000 million dollars.
2. Cryptocurrencies are illegal and are used to launder money
They are a currency that, although not regulated in many countries, is legal. The experts quoted in Criptonoticias , claim that there is unlikely to be used to launder large amounts of money because cash is still the favorite of criminals.
In addition, platforms to invest in cryptocurrencies are regulated in many countries and operate under regulations aimed at avoiding this crime.
3. Cryptocurrencies can be easily counterfeited
The criptodivisas operate with their own codes and, because of the nature of blockchain technology is almost impossible to duplicate transactions or produce fake criptomonedas. From this point of view, it is safe to invest in bitcoin.
4. Bitcoin is a Ponzi or pyramid scheme
Cryptocurrencies are a technology that serves as a store of superior value or as a safe and uncensored transfer protocol. In Satoshi Nakamoto's original Bitcoin proposal , there is never any talk of ROI when trading digital currency. They are only virtual currencies, not business models.
5. Investing in Bitcoin and other cryptocurrencies is bad business
According to the BBC , in January 2009 Bitcoin was worth less than a dollar, in 2017 it reached almost US $ 20,000, the following year it fell to US $ 3,200, in 2019 it rose to US $ 13,800 and in January 2020 it was around US $ 9,000. It has a high volatility due to different factors, but shows a very high profitability since its creation. In that sense, they can become a business if you feel comfortable taking risks; the key is that you do the proper market analysis and carefully study the behavior of the cryptocurrency.
6. Platforms to invest in cryptocurrencies steal from their users
You have to operate on platforms of recognized reputation, which offer you guarantees and good support. That way it is safe to invest in Bitcoin and other cryptocurrencies.
Cryptocurrencies may one day replace cash and credit cards, but for now, according to figures from HowMuch , all existing digital currencies are only worth 0.59% of the world's physical money and lack a solid structure to become a universal means of payment. What you can aim for is investing in Bitcoin as a form of diversification or to generate capital gains both in the long and short term.
Remember to research your options very well and consider various investment strategies for uncertain times.