Is Bitcoin a Good Investment?


Bitcoin has become a hot topic in the financial world in recent months, and stories abound of people becoming Bitcoin millionaires.  With all the buzz about Bitcoin and other cryptocurrencies, you may be wondering: is Bitcoin a good investment.

Ultimately, only you can decide what your investment approach should be and whether Bitcoin is an investment that should be added to your portfolio. However, you should understand the risks and should consider talking with a Bitcoin lawyer to understand the laws in place and the limitations of legal protections for your investment.

Is Bitcoin a Good Investment?

Bitcoin saw remarkable gains in recent months, but also lost more than 20% of its value in a single week. It is an extremely volatile investment, which means that you should not invest money in Bitcoin that you cannot afford to lose.

Bitcoin investing is also not yet subject to the same intensive regulations as other types of financial products like stocks. While there are many securities laws protecting investors in stock, including requirements for publicly traded companies to make financial disclosures, the Bitcoin market is currently far less regulated.  Further, Bitcoin exchanges and virtual wallets are not FDIC insured, so if the wallet company where your Bitcoin is stored suddenly disappears or is hacked and your money is taken, the U.S. government does not guarantee your investment and you could lose everything with no recourse.

While there are undeniably serious risks, however, there could be significant potential upside to investing in Bitcoin if you believe that this cryptocurrency will become a long-term trusted currency.  Some financial experts believe that a single Bitcoin could someday be worth millions if the coins become a long-term trusted source of currency, based on estimates regarding the number of coins in circulation and the number of coins lost.  However, if Bitcoin does not become a trusted currency that is utilized over the long-term, then it is possible that the coins will someday be worth nothing and your entire investment will be lost.

When deciding if you think Bitcoin is a good investment or not, you will also need to consider the price of coins at the time you are making a purchase. When Bitcoin was reaching values near $20,000, many believed that it was in a bubble or that a buying frenzy had artificially driven the price up much higher than it should be in the near-term.

Ideally, you don’t want to invest in Bitcoins at the height of the bubble and lose a significant portion of your investment immediately; however, if you believe that Bitcoin’s price is likely to increase significantly compared with where it is today and you intend to hold the investment for the long-term, buying when prices are high may not matter as much if you are not concerned about short-term losses.

Speak With a Bitcoin Lawyer Today

If you are considering a substantial Bitcoin investment or if you have concerns about problems with your current investments, a Bitcoin attorney at Zamansky, LLC can help you. Give us a call today to find out more about the assistance we can offer.