There are a number of myths about investing in Bitcoin and other currencies of this type that are worth clarifying if you are considering investing your money.
1. Cryptocurrencies are worthless
Critics of digital currencies often say that they have no intrinsic value and are not backed by another currency or precious metal. But the truth is that they are exchanged on a daily basis and are used as an established currency, so they clearly have a real value determined by the market. The important thing is that you can inform yourself and evaluate what to invest in before making a decision.
2. Cryptocurrencies are illegal and are used to launder money
They are a currency that, although not regulated in many countries, is legal. It is estimated that there is little chance that they will be used to launder large amounts of money, since cash is still the favorite of criminals.
In addition, platforms to invest in cryptocurrencies are regulated in many countries and operate under regulations aimed at preventing this crime.
3. Cryptocurrencies can be easily counterfeited
Cryptocurrencies operate with their own codes and due to the nature of blockchain technology it is almost impossible to duplicate transactions or produce fake cryptocurrencies. From this point of view, it is safe to invest in bitcoin.
4. Bitcoin is a Ponzi or pyramid scheme
Cryptocurrencies are a technology that serves as a superior store of value or as a secure and uncensored transfer protocol. In Satoshi Nakamoto’s original Bitcoin proposal, there is never any talk of any return on investment when trading the digital currency. They are just virtual currencies, not business models.
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5. Investing in Bitcoin and other cryptocurrencies is bad business
According to the BBC, in January 2009 Bitcoin had a value of less than one dollar, in 2017 it approached US $20,000, the following year it fell to US $3,200, in 2019 it rose to US $13,800 and in January 2020 It was around $9,000. Bitcoin has a high volatility due to different factors, but it shows a very high profitability since its creation. In that sense, they can become a business if you feel comfortable taking risks; The key is that you do the proper market analysis and carefully study the behavior of the cryptocurrency.
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6. Platforms to invest in cryptocurrencies steal from their users
You have to operate on reputable platforms that offer you guarantees and good support. That way it is safe to invest in Bitcoin and other cryptocurrencies.
Cryptocurrencies may one day replace cash and credit cards, but for now, all existing digital currencies are considered to be worth only a small percentage of the world’s physical money. What you can aim for is investing in Bitcoin as a form of diversification or to generate capital gains both in the long and short term.