Is Bitcoin worth investing in?
While Bitcoin is recently hitting its all times high, I get people asking me about how to invest in Bitcoin or whether they should go into Bitcoin investment now. If you are interested about Bitcoin topic, you can click here for some basic knowledge about it and here to read more about account opening.
Below are my personal view about Bitcoin (do your own due diligence, this is my personal view and is not a buy or sell recommendation):-
- Bitcoin has no fundamental hence it is not a productive asset. I view Bitcoin as one of the commodity products like precious metal, e.g. gold, silver, oil and agriculture products, e,g, soy, wheat, and even currencies like USD and MYR. These types of products have no intrinsic value. The gain is purely based on speculation on the future prospect of such assets and the demand. Hence, when many people think that the products will be needed in near future and many are buying into it, the assets will be rising in price. Same goes to what happen recently, Bitcoin price is increasing after Master Card and Tesla announcing their acceptance and usage of Bitcoin. If you are buying into this asset, you shall understand how it works and believe it will be used in the future. Buying Bitcoin without understand its function is a pure speculation and almost equivalent to gambling your money into something unknown to you.
- Bitcoin is decentralized money. The current currencies that we are using, i.e. USD, MYR are centralized money. The value of the currencies is largely controlled by the Central Government or Federal Reserve. Bitcoin is not being controlled by anyone hence can be viewed as a threat to the current monetary system. It is hence being considered as risk in investing in it as the value of Bitcoin can eventually be affected by the general acceptance of the various governments. If the governments are imposing strict rules (if they are able to do so), what do you think the price of Bitcoin will be? Just like what happen to Alibaba when the government is imposing rules on its monopolistic practices.
While saying the potential effect of government on Bitcoin, it is also important to note the feature of decentralized nature of Bitcoin. Personally, I felt that people are moving into freedom zone which people do not like to be controlled. One of the obvious examples is people is currently having free talk and comments on various online blogs and forums disregarding the government control. This is also why many people are favouring the online forums and social media platforms on expressing their views. Will Bitcoin be favoured as well in the future because it is something that not being controlled by the Government? I started to invest some monies in Bitcoin viewing it is one of the assets that can help me to diversify my risk of the current currencies. Also, I personally believe that it could be the future trend of the community who treasure freedom and digital. Hence, it is my view that Bitcoin can emerge as the currency that can potentially replace the current centralized monetary system.
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