There is no denying the fact that the bitcoin seems to be rising astronomically. It appears that the market refuses to give up on the bitcoin and yet, still prices the currency arbitrarily. However, it seems the bitcoin trend will not last forever. We will look at the reasons why.
Regulation: The Biggest Hurdle In The Success Of Bitcoin
At the moment, the crypto advocates are willing to ignore the power of regulation, and they are not ready to pay any heed to the role of centralization. Now, if the bitcoin trend is to last, it will have to replace the fiat currency.
However, the bitcoin can only be a replacement for fiat if it is regulated, and the problem is that bitcoin lacks regulation.
Volatility A Major Issue
Another problem with Bitcoin is that it is volatile. The investor can end up making rash decisions and If he makes one wrong move, he can end up encountering massive losses.
One thing you need to keep in mind is that digital currency can only last for a long time if it is safe. The biggest problem with Bitcoin is that since it is not regulated, there are chances that this digital currency can get hacked.
If we look at the records of 2017, then about 60 million in bitcoins was stolen through a trading site. Another bitcoin attack took place as well in 2017, and about 80 million in bitcoins was stolen.
Cannot Be An Authentic Store Of Value
Most people consider bitcoin as a store of value since it mimics gold characteristics. However, what is important to keep in mind is that the bitcoin is unable to generate any cash flow. Moreover, the bitcoin does not have any utilitarian function like other commodities.
The essential thing to keep in mind is that bitcoin can get priced like gold, but it is not valued like gold. This is yet another reason why Bitcoin may not last for a long time to come.
Even the finance world gurus like Warren Buffet believe that the success of the bitcoin will not last. Buffet is keen not to take up any position in bitcoin future. Some believe that the bitcoin is more of a bubble that cannot have a good ending.
Recently, bitcoin owners had to face yet another issue with Bitcoin. They cannot make any payments to the bitcoin exchange using their credit card. The best move in this situation is to opt for xcoins. It allows you to get quick access to bitcoins and make the payment without a problem.
Now, all these issues may leave new investors perplexed about whether they should invest in digital currency or not. The answer is simple. If you are interested in investing in digital currency, then you should avoid massive investments in this direction. The benefit of this approach is that you will not have to deal with a lot of losses.