Crypto-currencies like Bitcoin have bot te the news ter latest times. More because of the zuigeling of terugwedstrijd they generate and also because they have emerged spil an attractive alternative overheen the regular currency medium. However, how safe are crypto-currencies for investment?
Experts seem to be divided overheen this. While some say that crypto-currencies may be a good investment option if bought cautiously, others say that investing te them is fraught with risks, and should better be avoided. According to some experts, crypto-currencies like Bitcoin are safe spil they are assured by cryptographic algorithms, ie. they cannot be hacked, manipulated or altered. Also, the paperless, bank-less, state-less currencies are more stable than the government-backed currencies that can be lightly devalued or demonetized by central banks printing money. Investing te Bitcoins also makes sense spil it has substantially low inflation risk, no risk of currency collapse and they are limited ter number. Another advantage is that Bitcoins cannot be tracked and the proprietor needs to memorize a private key. They are, thus, free from economic inflation and regulatory woes.
Talking about crypto-currencies, Sreekanth G S, COO, Coinome Crypto Currency Exchange, says, “Traditional currencies were always either pegged against gold or were fundamentally inflationary. Overheen the last decade, Bitcoins have seen a surge ter consumption, treating them spil a store of value, a mode of payment or spil an investment. This surge is attributed to their limited supply and non-inflationary nature. Crypto currencies are generally de-centralised and not managed by government or monetary authorities. This disruption has made many nations keenly observe the evolution of cryptocurrencies, leading them to acceptance by counties like the United States of America, Japan, and Australia, to name a few.”
However, crypto-currencies have inherent security risks being digital and pseudonymous te nature, and the lack of a central authority leading them to occasional illegal uses. To overcome such risks and for the fruitful future of this technology, regulation and acceptance by the government is very anticipated by the public, he adds.
Thesis experts, therefore, advise to invest te, say, Bitcoins with a long-term view spil their value increases overheen time. Short-term traders may not find Bitcoins spil a lucrative investment option. However, ter the latest years the market has experienced a good volume of short-term traders earning good profits spil well. Therefore, some experts recommend investing te petite amounts and bracing oneself for massive value swings ter the long term.
On the other arm, there are many who are skeptical about crypto-currencies spil they have none of the stability mechanism typically associated with a currency – the very reason which makes them volatile.
“Crypto-currencies like Bitcoins are not regulated, implying that your investment is not safe. Ter case of any loss, you will not be able raise the kwestie with any regulator. The system is opaque because on what fundamentals the currency derives its value from is not known. If, for example, the value of bitcoin goes from $4000 to $Ten,000 ter two months, then there is nothing to determine the cause of the surge except for demand-supply dynamics, which can be manipulated,” said a currency and forex experienced at a brokerage, who did not wish to be named.
“So, I wouldn’t recommend investing te cryptocurrencies. From an Indian perspective, given the lack of transparency, cryptocurrencies may encourage parallel economy. I am not sure if it would be a good idea to encourage them,” he added.
It is a fact that Bitcoin is a legal muziekinstrument and well regulated ter developed places such spil the USA, EU, Japan, and Singapore. However, ter India there is no specific law governing it. The RBI acknowledges the transactions happening through Bitcoin and warrants a rigorous witness overheen them. Many countries are now formulating rules to regulate and tax the use of Bitcoin. Since there is a thrust towards going cashless ter India, it is likely the government may introduce a legal framework governing the use of crypto-currencies. However, if you are still looking to accumulate Bitcoin or any other crypto-currency, do not plunge te before you understand the nitty-gritties of thesis currencies.
Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Zakjapanner, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and go after us on Twitter.