Is it the right time to invest in Bitcoins?
February 3, 2021 (Investorideas.com Newswire) For the past six to seven months, a lot has changed in the crypto world. A spike within the crypto prices especially Bitcoins has occurred that not only disturbed the fiat currency but called for new investors. Previously, it was considered that the Bitcoins were residing in the bear market from the last January, however, since October, Bitcoin came out into the open.
Now, what is a bear market? You may call it a market slang that is influenced by sellers. As soon as the crypto left this portion of the market, a noticeable increase in the Bitcoins prices can be seen. Unimaginable profits are being recorded during this era that is causing quite the attention of financial investors around the globe. With Bitcoins on a tear, the crypto-sphere had come under the influence of a lot of raised voices from the financial world. And to some investors and analysts, cryptocurrency is in a dangerous position to invest. However, the Bitcoin billionaire software assists the investors to earn handsome dollars with its powerful trading algorithms.
The article probes into some of these claims made by the investors and whether there is any truth behind them.
The Scenario Aiding the Supporters.
Starting, the investors are providing two reasons for not investing in Bitcoins. First, they want the investors to peek into the history and look for similar events when the prices of Bitcoin skyrocketed and then came back to normal. Realizing the years 2013 and 2017, analysts want the investors to realize the cyclical nature of Bitcoins.
For stock or an investment to become volatile, the price of the product must increase the actual value of that asset. Therefore, we have to calculate the Bitcoins' intrinsic value.
Calling Bitcoins, a digital currency, we know that the currencies have a certain store of value. Before the 20th century, the fiat currency was backed by the gold standard that implicated that a paper note held a certain value backed by a precious metal or in some cases gold. For that, some coins were even made of the precious metal that they represented. However, these gold standards were abandoned in the 20th century. Nowadays, the fiat is usually backed by the individual's faith. Now similar to other currencies, the need for crypto to have a store value backed by gold is also null and void. So the people questioning the legitimacy of crypto are wasting their time.
The Scenario Aiding the Doubters.
The immense increase in bitcoin prices aided the doubters to speculate the legitimacy of cryptocurrency. And to some extent, they are also true. The overnight increase of bitcoin prices reached an all-time high of 20,000 dollars. Usually, the assets do not increase their prices such quickly. And doubling their worth over the limited period, Bitcoins came under the microscope of doubters.
The chief investment strategist of Bank of America addressed this sudden increase as a warning for all the investors. Moreover, to him, the crypto-market has entered a dangerous bubble. From the last year, the prices have multiplied over 1000%. This made the issue quite sensitive.
The bottom line:
After thoroughly analyzing both scenarios, the question to the answer that are bitcoins a safe investment is still very much unclear. The solid encryption and stable blockchain technology support to aid the supporters whereas the previous scenarios support the doubters. However, one point is clear that the bitcoins stocks are highly volatile and anything can happen in the stock market.
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