Investing in Bitcoin, Is It Good or Bad for You?
Bitcoin is probably the most volatile form of investment you could think of. If you haven’t heard of bitcoin in 2021, then you must be living in a cave. Should you buy bitcoin? Is it safe to invest in bitcoin? It’s okay to have these doubts, you are not the first one after all. In this article, we will dig deep into bitcoins.
What is Bitcoin?
To understand bitcoin, first, you should know about cryptocurrency. Generally, transactions are carried out throughout the world through a centralised system, we call them banks. In the case of cryptocurrency, a person can send money directly to someone else without a third party medium.
Yes, it’s a form of digital currency where the transaction is carried out and maintained by a decentralised system using cryptography. Litecoin, Ethereum and bitcoin are types of cryptocurrency while bitcoin has become popular in recent times.
Bitcoin was founded in 2008 and implemented in 2009 by Satoshi Nakamoto, a pseudonymous name given to a group of people who developed bitcoin. It is unclear who has invented bitcoin till now.
Is Bitcoin Legal in India?
It is not entirely legal but it is not illegal as well. Bit confusing, isn’t it? On 6th April 2018 India’s Central Bank, the Reserve Bank of India imposed a ban barring banks from the purchase and sale of cryptocurrency.
Soon panic spread across many companies in India that were offering cryptocurrencies services. It was a dark age for those blooming start-ups.
However, the Supreme Court of India lifted the ban in 2020 allowing the banks to handle cryptocurrency transactions. Now, cryptocurrency is legal in India but it’s still a legal tender of money. Bitcoin as a payment mode is not accepted in India just like stocks, you have to use our INR to purchase something you like.
Is it Safe to Invest in Bitcoin?
The value of bitcoin was 0$ when it was introduced in 2009, now it is trading around 46,457 $ roughly 33.5 lakh (1$=72 INR approx.). I know it’s hard to believe but such is the value of bitcoin. It doesn’t mean you have to empty your wallets and jump right away to invest in bitcoins.
As mentioned earlier, the price of bitcoin has been erratic over the years especially in recent times. The value of bitcoin was at 450 dollars in 2016, then it rose to 16000 dollars in 2018 and it plummeted to 3500 dollars in 2019. Now it’s at a record high of 46000 dollars. You get the point, right? It’s because of the investors that the prices go up and down.
If you see the growth of bitcoin in the last year, you can see it rose by 10x times, it’s not the only investment with such growth. Take Adani Green Energy or Dixon Technology, for example, even their stock prices increased by 10x times. To put it bluntly, no investment is safe, you have to do your research before investing in such entities.
There’s a ton of opportunities out there, observe the market movement for a while, then decide what suits you better. Investing in bitcoin is probably a good choice right now with larger potential growth in the coming years. Remember this, just because Tesla invested 1.5 billion dollars in bitcoin doesn’t mean you have to start investing in it. There are risks involved, but the question is are you willing to take the risk?
Note: The above article was published in “The Asian Chronicles”, a tabloid newspaper and magazine headquartered in Gurugram, Haryana.
