This weakness also happens to be the strength there is a decentralization of the currency, which means just a few people cannot dictate how the asset should behave. This has led to a few forks with many more lined up for the future as a few factions break away. The third risk is the lack of consensus in the Bitcoin community.
I believe the risk from this is also minimal even if Jamie Dimon thinks otherwise. It will take a lot of effort to make all of them backtrack, and the chances of this happening is slim to none.
Even Vanuatu is now providing citizenship in exchange for Bitcoins. Now the problem here is that Australia, Switzerland, Russia, Japan, and Canada already have policies that favor Bitcoin. Governments may decide to shut down Bitcoin from within their borders, but this will require coordinated actions from all Governments. The second risk is from Government regulations. The damage to Bitcoin itself will be very minimal. It is only newbies, who really don’t understand what Bitcoin is, that are going to be caught in this storm. This is not likely to bring down Bitcoins, because most Bitcoin holders know about pyramid schemes. I have already mentioned the first risk that Bitcoin faces - pyramid schemes. Whether Bitcoin will remain as the largest cryptocurrency after everything comes down is something I cannot tell. Bitcoin will have to crash first before the dominoes come falling down. Bitcoin is the largest and most established cryptocurrency, and for as long as this currency is alive, other cryptocurrencies (not all of them though) are going to do well. I am now going to focus on the risks facing Bitcoin. The drop and then a quick recovery has been the hallmark of Bitcoin for several years now, but the question is how sustainable can this be? Those who bought at $19,000 before it dropped to $11,000 and held on are probably heaving some sigh of relief now as the currency seems to be recovering. Those who bought when the price hit a previous all time high of $7,600, before dropping to $5,700 are probably now smiling because the price is now climbing towards $16,000. It doesn’t matter at what price you enter, it just looks as if it is almost impossible to lose. The latter is associated with gambling, but the former seems to be describing Bitcoin/cryptocurrencies at the moment. Then there is the other one in which you make small losses, but one huge again, also with a variable chance of occurrence, which can make you wealthy. The one in which there is a lot of small gains and one large loss, with a variable chance of occurrence, which can wipe out your entire portfolio and even run you into huge debt. There are two types of risky investments. But the problem is I don’t know when and I don’t know how, and I also don’t know at what level this will happen. This is something that will happen as long as the sun rises from the East. The Bad NewsĬryptocurrency prices are going to crash. Just the same way that the MMM pyramid scheme used Naira does not equate MMM with Naira. These schemes are done using Bitcoins, but note that these schemes are not Bitcoins. The pyramids will collapse one day, and you will be left with the short end of the stick. Please note that these are pyramid schemes. There are a lot of schemes out there that promise some kind of Bitcoin payouts if you buy Bitcoins and invest in their schemes. Know this and know peace then construct your portfolio accordingly.īefore we go on, I need to point something out real quick. Therein lies the risk - an asset that can gain over 2,900% in just under a year can easily lose 99% of its value in just one week. There is no widespread and easily accessible asset that has done this well, except a couple of other cryptocurrencies. In just about a year, the currency is now selling at $15,500. Now, we are all caught up, and we can talk about the risk of holding, or trading, cryptocurrencies.Īt the time of writing the first article in September 2016, Bitcoin was selling for around $600, and the time of writing the second article in December 2016, the price was around $770. Now when you are done, also read this one. If this is your first contact with any article that is cryptocurrencyrelated, I strongly suggest that you read the first article I wrote about the Bitcoin here. Now, we’ve gotten that disclosure out-of-the-way, let’s get down to business. A friend even accused me of being so bearish about cryptocurrencies, yet I just couldn’t stop talking about how people are getting rich out of them. I may be a little biased when it comes to cryptocurrencies, but whenever I talk to an audience about it, I try as much as possible to reiterate the risks.
0 kommentar(er)
