Is Bitcoin (BTC) A Good Investment?

Last Updated October 19th 2022

10 Min Read

Bitcoin’s past price action, performance, and projected future growth give the digital currency all the features of a good investment. But the voice of its critics is as loud as its volatility, and it has planted a wall of doubt so massive, not even the biggest price rally can dismantle.

Thirteen years after its launch, the debate over whether BTC will eventually become the global reserve currency and store of value or if it is the biggest bubble is still as relevant and fiery as it was when the cryptocurrency just launched.

At some point, you too must have asked yourself whether Bitcoin is a good investment. If it really is the future of global finance.

Today, we put this question to rest by debunking the risk debate, introducing you to legitimate places to buy Bitcoin, and highlighting the advantages/disadvantages of Bitcoin investments in this post.

Read on.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Is Bitcoin (BTC) Investing Risky?

As is the case with virtually any other investment, purchasing Bitcoin carries risk. The fact that speculative investors have hugely adopted it and that it still is a maturing technology with no reserve value hasn’t made it any easier. Its value is derived purely from the market forces of demand and supply, which are largely sentimental and can be easily manipulated by government interference or through pump and dump schemes.

These have made it susceptible to frequent and untamed volatilities that crypto critics use to bash it with and describe it as the riskiest investment today. Its high value has also made it attractive to criminal elements in the name of scammers and hackers, further aggravating the Bitcoin BTC investment risk.

Several crypto analysts, however, believe that situation isn’t as dire as the mainstream media and Bitcoin critics would have you believe. James Ledbetter, a CNBC contributor and editor for fintech newsletter FIN, for instance, feels that while there are legitimate fears when it comes to Bitcoin investment, its risks have been overblown.

He, like most other crypto experts, is convinced that the level of risk carried by Bitcoin investments is commensurate with the reward it promises.

These crypto analysts and Bitcoin investors have also attributed this overblown risk of Bitcoin investment to its immaturity. They are, therefore, confident that the Bitcoin blockchain matures and receives global adoption, its price volatility will die down, and the threat of theft will reduce as investors learn different ways to keep their crypto secure.

Michael Saylor, the CEO for MicroStrategy Software Company and a lead Bitcoin advocate, for instance, is confident that Bitcoin will eventually rise to over $11 Trillion. At which time he expects it to have achieved global adoption and relative stability just as Gold or fiat currencies.

Read Also: Is Bitcoin (BTC) Worth Buying

Where To Invest In Bitcoin (BTC)?

There currently are countless reputable online platforms spread all across the world where you can buy Bitcoins with ease. These include crypto exchanges, brokerages, and peer-to-peer trading rostrums. If you are to avoid scammers, we advise that you consider buying Bitcoins only from registered and highly reputable trading platforms.

In most cases, these will subject you to Know-Your-Customer (KYC) processes and demand that you verify your identity before you can start buying your first Bitcoin. Most will also provide you with free custody services (offer to store the purchased BTC on your behalf), but where possible, we advise that you first acquire the ultra-secure hardware wallet that helps you store your BTC offline.

The Bitcoin buying process on all trading platforms is almost similar and quite straightforward. Here are the steps involved:

Step 1: Visit the official website of your preferred exchang and choose to open a crypto trading account.

Step 2: Deposit funds into the approved account. Different exchanges support varied payment methods, but the most common are Bank, eWallets like PayPal and Skrill, debit/credit cards, of other cryptocurrencies.

Step 3: Navigate to the user dashboard and buy Bitcoin.

Step 4: Move the purchased Bitcoin to the ultra-safe hardware wallet.

Let us now go over two of the best places to buy Bitcoin.

eToro - Best for social trading

eToro is a famed crypto trading platform whose popularity has soared in the recent past because of its hybrid nature and support for social trading. It is one of the few regulated and highly reputable platforms that give the option of buying actual Bitcoins or trading Bitcoin CFDs with leverages starting from 1:2.

eToro also grants all its platform users access to social and copy trading tools. Social trading lets beginners interact with and receive mentorship from PRO crypto traders, while copy trading lets them copy the winning Bitcoin trading strategies - essentially letting them earn as they learn.

The highly innovative platform also exposes users to such other trading options as Bitcoin-based managed crypto portfolios. Other eToro benefits include providing Bitcoin custody services for investors and providing them with a free non-custodial eToro mobile wallet app.

Coinbase - Best for security

Coinbase is arguably the largest crypto exchange in North America and one of the most liquid Bitcoin trading platforms in the world. It is also is one of the oldest Bitcoin trading platforms seeing that it was established in 2012. It is famed for its commitment to the safety of client deposits, attractively low minimum deposits, and BTC trading limits, as well as a beginner-friendly trading platform.

Coinbase also runs the unique ‘Bitcoin Earn’ program that pays traders for learning about the different cryptocurrencies. Like eToro, it also provides Bitcoin custody services for its platform users and insists on storing 98% of all digital assets in cold storage and insuring the remaining 2%. In addition, if you don’t want the exchange to hold your coins, it provides you with a free non-custodial wallet app.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Pros Of Bitcoin (BTC) Investments:

Potential for high returns

Bitcoin prices are expected to rise eternally, presenting Bitcoin investors with an opportunity to earn massive returns in the future.

Inflation protection

Unlike fiat currencies, which are prone to inflation because of their infinite supply, Bitcoin has a finite supply of a maximum of 21 million BTC coins that makes it inflation-proof. You, therefore, could use a Bitcoin investment to shield your cash from inflation.

Inexpensive international transfers

Bitcoin can be easily transferred across borders in a bureaucracy-free, near-instant, and inexpensive process.

Liquidity

Bitcoin is one of the liquid digital investments. It can be easily converted to cash and vice versa.

Easily accessible

Bitcoin is also one of the most accessible digital assets. It is listed with virtually all crypto exchanges, brokerages, and peer-to-peer trading platforms across the world.

Cons of Bitcoin (BTC) Investing

Hacking

Hacking presents the biggest and most lethal threat to bitcoin investors as there is often is no recourse for recovering your coins once they have been stolen by hackers.

Untamed volatility

Bitcoin also has one of the highest price volatilities. Its price is also prone to frequent crashes, which may lose you money, and it has a painfully slow recovery process.

Limited use

There is only so much you can do with Bitcoins today, safe for speculative investing and making purchases in a few stores. Its adoption is still low and is yet to be officially recognized as a legal tender/medium of exchange.

Can Bitcoin Be Exchanged As A Legal For Real Money?

Yes, Bitcoin can be converted back to real money in a fast and straightforward process. You will first need to create a Bitcoin trading account with a crypto exchange, brokerage or peer-to-peer trading platform. Use the sell option on the user dashboard to sell the BTC and have the cash forwarded to your Bank account.

You could also convert Bitcoin to cash in Bitcoin ATMs strewn in all the major cities across the world. The transaction fees on ATMs are, however, higher than those charged at an exchange.

Is Bitcoin (BTC) The Future, Really?

A lot of things have happened in the last few years, and they all seem to suggest that Bitcoin is the future of money. It started with corporations like Tesla and multiple merchant stores accepting Bitcoin as a payment method. Financial regulators across the world followed suit when they started recognizing Bitcoin as a commodity, and even countries like El Salvador started acknowledging Bitcoin as a legal tender. Companies like MicroStaretgy then started adding Bitcoins to their balance sheet.

Moving forward, crypto analysts are convinced that Bitcoin will overtake gold’s market cap and stand as the standard global reserve and store of value. They also anticipate massive adoption of Bitcoin as a medium of exchange in the near future, especially when more governments introduce their own CBDCs (Central Bank Digital Currency). And all these point to the fact that Bitcoin is edging closer to being the future of the global finance industry.