Should you hold on to your Bitcoin or sell it?
Some Fortune 500 companies are showing their support for digital currencies driving Bitcoin’s price to a new record high. One Bitcoin is now worth nearly $50,000.
Although there are several digital currencies available, Bitcoin is the largest based on market value.
The price increase can be due to the backing from Tesla, BNT Mellon, and Mastercard.
Last week, Tesla announced that it bought $1.5 billion worth of bitcoin. And it would also accept cryptocurrency as a form of payment soon. The announcement undoubtedly helped in raising the currency’s price by 10%.
Last Thursday, Mastercard said that it would start supporting cryptocurrencies this year.
But is it time for you to invest in bitcoin?
Invented in 2008, bitcoin started trading in 2009. From 8 cents, it climbed to $327 in 2015. Last March 2020, it traded around $6,200. And it continues to increase since then.
No Intrinsic Value
But bitcoin has no intrinsic value. Its value will depend on what the market says. Producing it is also expensive.
Mining can be quite complex as it involves solving puzzles using digital equipment. The total stock is capped at 21 million units.
It’s a new alternative asset class. it’s a hedge that aims to protect the fiat portfolio.
However, there’s no legal guarantee of its safety if you invest in it. Just like other cryptocurrencies, bitcoin has legal risks. The risk is higher which can lead to a prolonged crash.
That’s why financial experts urge consumers to be cautious in investing in it. In that way, they won’t get trapped in this scheme.
But all investments are risky. Still, crypto is considered a high-risk, high-investment option.
That said, you must only invest in it according to your risk appetite.
Bitcoin gained curiosity among youths around the world. The support of high-profile business owners caused an increase in its popularity.
Many are fond of cryptocurrencies because consumers can easily transact with them. They allow small businesses in expanding their presence across the global market.
The future of bitcoin and cryptocurrencies is still unknown. The governments are still doubtful about them because of their associated risks.
Because of their popularity, though, more and more startups are building products based on blockchain. Many tech giants are jumping on the bandwagon. Soon, it will become mainstream. More and more people will use crypto.
However, bitcoin is still highly volatile. It will be an asset sans intrinsic value. It means that it can be anything or nothing.
If you have a healthy risk appetite, you may consider investing in it. If you have a strong capacity to absorb your losses, then bitcoin might be a good investment.
Then again, financial experts warn everyone that it’s the biggest market bubble right now. Over the next year, it can fall than rising.
It has been on a wild ride.
For now, experts are waiting what might pop the bubble. And when it will happen.
It’s up to you to wait or sell it while it’s still worth nearly $50,000.