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Risks and future of Bitcoin

Updated: Mar 28

Risks and future of Bitcoin

Bitcoin has seen a rally in the past few months, only to collapse again: its price tripled in just three months - only to lose almost a third again later. Nevertheless, the currency now seems to be acceptable to payment providers and investors. Right?

After Bitcoin was quoted at 12,000 in the mid season 2020, it hit a historic all-time high of 41,000 in 2021. But just a few days later it slipped back to a good 26,000 dollars. Nevertheless, the reputation of the cryptocurrency is increasing worldwide. Analysts at the investment banks even believe a rate of up to $ 150,000 is possible.

What Has Brought Bitcoin Such A High Flight In The Past Few Months?

There are essentially three factors responsible for this: Bitcoin is no longer the niche investment it was launched over ten years ago. In the meantime, not only private but also public investors such as funds and banks are investing in Bitcoin.

Since its number is limited to 20 million pieces, the current demand leads to an even higher increase in its price. And due to the persistent low interest rates, more and more investors are using it as an option to their earlier investments.

What Does This Mean For Further Development?

The market is misleading, because unlike stocks or gold, Bitcoin is not stored with a value. It does not generate any cash flow or dividend payments. It is and remains highly speculative. Its price gains are not sustainable at all. This can be seen in the current ride.

How Big Are The Risks If You Invest In Bitcoin As An Investor?

Just like the earnings opportunities, the risks are immense: the investors have calculated in a study that the price of Bitcoin can rise to as much as 150,000 dollars. But that's pure theory for now. What we have seen in recent years and are seeing again now is volatility: These price fluctuations are dangerous for investors, as they do not constantly show the rates.

The contents of this article are for informational purposes only and are not investment advice.

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