Is it Smart to Invest in Bitcoin Right Now? - Broke in London

Is it Smart to Invest in Bitcoin Right Now?

Guest post by Zoe Price

Recently, there has been a lot of buzz surrounding Bitcoin. In October, Bitcoin prices soared due to the news that PayPal was making changes that would allow customers to trade Bitcoins and other cryptocurrencies on their platform. With many other major businesses like Microsoft, AT&T, and Overstock now accepting Bitcoin as a payment method, it’s clear to see that Bitcoin is being adopted on a broader scale and as one of the best investment opportunities of our generation.

Why Invest in Bitcoin vs. Other Assets?

You’ve probably seen a lot of positive things about Bitcoin recently. Some investors will compare Bitcoin to gold since it increases in relative worth against gold and the US dollar. Unlike flat currencies, hyperinflation is not possible when it comes to Bitcoin. It’s coded to ensure that there will never be more than 21M Bitcoins to exist, and approximately, 2.8M of those are left to mine. As demand outstrips supply and the total supply is capped, the price of Bitcoin is expected to rise.

The Top Reasons to Invest in Bitcoin:

If you understand the market and the risks involved, there are several reasons to consider investing in Bitcoin. Digital assets like Bitcoins are considered by many investment experts to be a wise choice for diversifying a portfolio, while less correlated assets are often the best choice for helping overall returns on investment. Bitcoin is also considered to be a hedge against geopolitical uncertainty and inflation, and it’s gaining more and more acceptance as a legitimate asset class as it becomes more widely accepted as a payment method. So much so, that many high-net-worth investors are now investing in cryptocurrencies.

Understanding the Risks:

While it’s clear to see the many benefits of investing in Bitcoin, it’s important to remember that just like any investment opportunity, there are also risks to be aware of. If you’d purchased Bitcoin three years ago, for example, your investment would have lost money by now. Like any investment, it’s a wise idea to buy low and sell high with Bitcoin, but it can be difficult to value since supply and demand play a major role and it is volatile.

Should You Invest in Bitcoin?

Just because some of the bigger players are jumping on the Bitcoin bandwagon doesn’t mean that it is a good investment opportunity for everybody. Before you buy in, it’s important to know the risks and have an understanding of the potential gains, just as with any investment. According to experts, it’s important to invest in assets that you understand, so before deciding whether or not buying Bitcoin is the best option for you, it’s a wise idea to do your research to understand exactly how it works. Thankfully, there’s no shortage of educational resources on Bitcoin and other cryptocurrencies to take advantage of.

Bitcoin is undoubtedly a great investment opportunity, but like any investment, doing your due diligence before you buy is important.