Bitcoin investment have been on the lips of many investors and professional traders for some time with mixed stories of how people invested in it and then forget about it only for the little initial bitcoin investment to then grow into huge wealth.
As an accountant who has flare for investment and business technology, I have invested some time and resources into investigating the investment potentials of bitcoin. And what I found and experienced inspired me to write this post.
This article is a product of my personal opinion that is backed with experience and research as far as bitcoin investment is concerned.
Just in case you are wondering what the mechanics of bitcoins are, bitcoin is a cryptocurrency that is mined from computer processing power and this is decentralised in nature.
No central bank of any nation can control this currency unlike forex trading that is largely influenced by the action of a country or region. A good example is what happened to a major forex broker in Europe that led to the closure of its biggest branch leading to loss of investments and jobs.
The decentralized nature of bitcoin cryptocurrency makes it very attractive to not just legit businesses but also to some illegal activities.
No single government will be able to exercise significant control over the mining, circulation, spending and investment in bitcoin. But, wait a minute, not for the tax men, according to CNN, bitcoin transactions will now be taxed in the United States and this will only act as deterrent to small businesses that are accepting bitcoins as a payment method or planning to do so.
Businesses are now beginning to accept bitcoin as a form of payment. According to Coindesk.com, Microsoft and Dell became the latest big brand that started accepting bitcoin. That means you can make some money if you position yourself well enough to tap into bitcoin investment.
To answer the question of whether bitcoin investment is a good investment opportunity or yet another hype, we would briefly explore the qualities of investment. The final decision will be entirely yours to make.
MAIN QUALITIES OF GOOD INVESTMENT
This section of this article on the potential of bitcoin investment would draw your attention to qualities and features of good investments.
Safety of capital:
The golden rule of any investing activity is that the safety of your capital must be reasonably assured. In as much as there is no such thing as safe investment, one must still perform due diligence before patting ways with their wealth.
In my previous article on what is investment, I delved more into what is and what are not good investment opportunities.
Ability to earn returns:
What is the point investing if there is no prospect of you making handsome returns? The essence of the whole process of investment is for sort of profit to be made.
Bitcoin investment has real potential to make intelligent investors rich. But before you can reap from bitcoin investment, you have to learn the basics of bitcoin investment.
Availability of an exit route:
Every good investor understands the importance of having an exit strategy in an investment. Take Warren Buffet as an example, he sold all his shares in a major oil company weeks just before the oil price at the international market started taking a nosedive.
You should seriously consider looking elsewhere if there is no readily available exit route in any investment vehicle you are looking at. At the time of writing this article, selling and buying bitcoins are relatively harder compared to other investment vehicles.
You can’t just buy a bitcoin with your credit card. And for me, that is a major drawback.
Provides the investor with freedom:
Majority of passive investors make investments into a cause just to free up time for other things they love doing. Bitcoin investment when done properly does not require constant monitoring so it frees up your time for other things.
But, completely ignoring your investment is a dangerous strategy that has caused a lot of people in the investment community unimaginable hard ship and pains.
Scalability and flexibility:
Another feature of modern day investment is that rigidity and inflexibility should be at the barest minimum. You don’t expect a prospective investor to go through undue stress just to give you their money.
Investors will simply not be interested if the underlying process of an investment is not scalable and flexible.
Scalability in this context means the ability to add and reduce your stake in the investment at any given time.
Bitcoin investment so far has met this requirement but not without some concerns. It all depends on the broker you are using. You have to do your research before going with any broker. I would have loved to name the company I use but it is no my thing to make referrals.
One of the most important features of an investment is that it must be legal. There is no such thing as grey area in investment. If you have been following the news you must have been aware of some countries clamping down on bitcoin investment companies thereby causing real financial hardship to many people.
Some people think that the anonymity of bitcoin investment is an incentive for criminals to flux the cryptocurrency thereby making it too risky an investment vehicle.
Just before you go
My take take on bitcoin investment is that it is a game that is worth playing but, not to be played too much. After all you will not all your life savings in a stake except you have gambling problem which am sure you don’t have.