Bitcoin is attracting many investors to the market, and it is very difficult to ignore the growing popularity of this Cryptocurrency. However, there are many who still consider these investments as terrible because the price of Bitcoin always fluctuates.
Bitcoin is creating a huge impact on the younger generation as many don’t consider investing in other assets except Cryptocurrencies. The high return on investment is encouraging investors and other individuals to invest in this valuable asset.
At the same time, many are losing their hard-earned funds in a very short time due to a lack of knowledge regarding this industry. Prior to investing, you must understand how does Bitcoin work, and then you can proceed accordingly. Before investing in this asset, you must read the pros and cons of Bitcoin investment.
5 Reasons Bitcoin Is a Terrible Investment 2021
Bitcoin was the first Cryptocurrency that was invented in the year 2009 by Satoshi Nakamoto. Some experts even believe that this digital currency can replace fiat currencies in the future. However, lack of centralization creates a fear in the minds of investors and this prevents them from investing in this asset.
At the same time, security threats are already encouraging individuals not to invest in Bitcoin and other digital currencies.
According to some investors, Bitcoin is considered a terrible investment in 2021 due to various reasons and some of them are described below.
1. Decentralized Currency
Bitcoin and all other Cryptocurrencies are decentralized. Though there are physical barriers during transactions, this can create an issue sometimes. You cannot claim any compensation once you are hacked online while using this digital currency.
No government or banks will be able to help you if you face any issues regarding the same. Thus, lack of centralization is one of the biggest reasons why many governments don’t allow the use of this digital asset in their own country. There are many countries where the use of this digital asset is considered legal and vice versa.
2. Price Volatility
This is one of the biggest reasons why Bitcoin is considered a terrible investment in 2021. The price volatility of Bitcoin can affect your invested amount to a great extent. The price can fall more than 50 percent than the actual value and vice versa.
You may not be aware of the Bitcoin market, so before entering into this realm, you must gain some marketing knowledge and experience. It is because the new candidates of Bitcoin are the regular victims of Bitcoin losses.
3. Scam And Frauds
You might have seen or heard on the internet or television about the growing frauds and scams in digital assets. There are various fake websites on the internet that are selling Bitcoin. They are actually fooling the innocent people who are new in this domain.
So, due to the growing popularity of Cryptocurrencies such as Bitcoin, cybercriminals are creating fake apps and accounts and targeting the newcomers of this industry. Not even new candidates, even Microsoft suffered huge losses via this digital asset. This creates fear and thus prevents investors from investing in Bitcoin.
4. No Refunds
This is the disadvantage of being a decentralized currency. If you suffer any losses in the case of traditional currencies, then there are insurance companies or banks that are there to provide you with some refunds if you meet their criteria.
Unlike traditional currencies, there are no refunds in Bitcoin. If you suffer any losses, then there is no one to provide you with any compensation. Hence, this is a risky investment that you need to deal with all by yourself after investing.
Also, keep in mind that once you lose access to your Bitcoin wallet, you can lose all your Bitcoins in no time. You must be prepared for this beforehand.
5. Cyber Hacking
Cyber Hacking is another big issue that is rising in the Bitcoin industry in 2021. Moreover, due to Bitcoin’s anonymous nature, this problem is growing and preventing investors from investing in Bitcoin.
Cyber hacking mainly occurs on Cryptocurrency exchange platforms, and there are several investors who lose their assets on these platforms. This is the reason why some governments are not allowing this digital currency in their country, and this is already discussed above. Thus, Bitcoin is considered a terrible investment in 2021.
The Final Thoughts
If you are new to this industry, Bitcoin seems to be risky but slowly you will realize the value of this asset in the long run. Moreover, you must consider the cons of Bitcoin investment in 2021 at the same time, and you can also list some more in the comment section below.