Crypto Traders And Investors, What Are The Risks Of Investing In Bitcoin?

Which Are The Risks of Investing In Bitcoin?

Bitcoin has been calling the attention of several investors since it has shielded important returns in the past. Some experts call Bitcoin digital gold and believe that its price would increase in the future.

However, investing in bitcoin has its risks. Ted Jenkin, CEO at Oxygen Financial said that Bitcoin is a risky asset.

Due to the fact that Bitcoin (BTC) is a peer-to-peer digital payment system, it does not have a government or central authority. This means that if an investor lost money, he would have a difficult situation to recover what he lost.

Jenkin says that if there is an attack and someone steals the funds of a user, then, there is no place or institution where to go and complain about this situation. Several attacks took place in the space generating important losses for cryptocurrency exchanges and investors.

Additionally, he says that it could be a problem to report taxes from profits related to virtual currencies.

If a person invests a certain amount in Bitcoin and registers an important profit, then, that person would have to report the profits it had to the IRS and pay the necessary taxes.

“If you don’t, you still run yourself subject to the risk that if you get audited and somebody finds out that you did make money, you could cause yourself a larger problem down the road.”

Furthermore, Bitcoin and other virtual currencies are still in their early days. That means that these forms of payment do still have to become mainstream. It is not possible to use them in major retailers or shops.

Cryptocurrencies could be a great way to diversify portfolios at the moment of planifying investments for the future. Some experts believe that holding 1% to 5% in virtual currencies is a good option. If all the other investments were negative, this small percentage invested in cryptos could make the difference.

However, it is also advised not to invest more than what investors are able to lose. Bitcoin and other digital assets are very volatile and their price can fluctuate even 20% in just one day.

Since its all time high, Bitcoin lost over 65% of its value, while other virtual currencies registered losses of over 90%. However, Bitcoin is still operating 5x higher than at the beginning of 2017, being one of the most profitable investments in the financial market.

At the moment of writing, Bitcoin is being traded around $6,400 dollars and has a market capitalization of $111 billion dollars.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Avatar
Bitcoin Exchange Guide News Team
B.E.G. Editorial Team is a gracious group of giving cryptocurrency advocates and blockchain believers who want to ensure we do our part in spreading digital currency awareness and adoption. We are a team of over forty individuals all working as a collective whole to produce around the clock daily news, reviews and insights regarding all major coin updates, token announcements and new releases. Make sure to read our editorial policies and follow us on Twitter, Join us in Telegram. Stay tuned. #bitcoin

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,468FansLike
2,795FollowersFollow
4,233FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Deregulating Bitcoin May Increase Speculative Trading Instead of Technical Innovation: Japan’s New Top Financial Regulator

Ryozo Himino, the new top financial regulator of Japan, wants the country to take caution over promoting digital assets, arguing that instead of promoting...

Goldman Sachs New Digital Asset Manager Reveals Plans to Bring A ‘Digital Token' to the Bank

U.S. financial giant Goldman Sachs is pushing forward its plans to launch a digital asset with the appointment of its new digital asset...

Grayscale Ethereum Trust Files with SEC to Halve the ETHE Locking Period Same as GBTC

Grayscale Investments has publicly filed a registration statement on Form 10 with the US Securities and Exchange Commission (SEC) on behalf of its Ethereum...

Florida Teenager Behind the Infamous Crypto Twitter Hack Pleads Not Guilty to 30 Counts of Fraud

Graham Ivan Clark, the 17-year old Florida teenager accused of being the main culprit of the most significant privacy breach in Twitter’s history, has...

Bitmain’s Management Feud Is Finally Affecting Business Operations; AntMiners Shipments Delayed

Bitmain’s top-level struggles cause a three-month delay in Antminer hardware. Two mutually exclusive solutions offered to customers. The constant wrangling within the largest Bitcoin...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today