Top Risks Involved in Bitcoin – Make Sure You Aware of Them

Back in 2011, if you even pitched something like investing in Bitcoin, everybody, including you, would have laughed hard. Now everyone wants to invest in a time machine that would take them back so that they could buy as much Bitcoin as possible.

Bitcoin is a cryptocurrency that has surpassed the value of the normal currency in a way that could not have thought possible. The future of bitcoin is still unknown. The value of one bitcoin is so high that the curve on the graph might take an unexpected turn.

Once again anything is possible. If an artist like Big Shaq can make random noises and still hit the billboard, Bitcoin will impact the world either way in the coming years.

Since most people are now interested in the world’s most valuable currency, knowing the risks involved may be the proper step before you mortgage your home.

Among the several risks you may incur, here are the top Top Risks Involved in Bitcoin you should brace for:

Cyberattack

A couple years back, a company called Mt. Gox which was managing Bitcoin’s trading volumes got struck by a cyber-attack. This sent Bitcoin back in advancement.

Even though they have taken every security measure they could possibly think of, it is unsure what’s going to be the next attacking point.

Everything has a weak point. Bitfinex, which is currently managing around 50% of Bitcoin’s trading volumes is in for some heavy attacks according to MalwareFox. The bigger they are the harder they fall.

If another attack like the one that happened four years ago was to happen today, every cryptocurrency will lose its worth significantly, Bitcoin being on top of the list.

Bitcoin Blockchain blowout

The Reason why Bitcoin has been able to keep its rank as number one on top of the list is that of the blockchain tech.

The blockchain is the digital and decentralized ledger that records transactions without the need for a financial intermediary. I think you are familiar with such intermediaries such as banks and mobile wallets.

The Bitcoin blockchain is open source, meaning that anyone can access it anywhere. It is therefore secure as no one can make any alterations without getting detected.

There are so many other cryptocurrencies forming up and pretty soon, two things might happen:

  1. Bitcoin loses its value due to the acceptance of cryptocurrencies everywhere.
  2. Bitcoin loses its value due to the demeaning of the blockchain.

Bitcoin will lose its value either way. If more and more cryptocurrencies are accepted and they remain strong in the market as main currencies, we are back to where we started with paper money.

On the other hand, if the blockchain tech is rejected by institutions and companies, it will not be worth much anyways.

Regulations

Bitcoin is being accepted more and more everywhere. Some countries even bought tenders in bitcoins. As I mentioned earlier, the growth of Bitcoin inspired many more types of cryptocurrencies.

These may also be accepted into the market everywhere and compete with Bitcoin, which will lower in value.

If regulations were set, and cryptocurrencies are hindered from operating freely, it may be good for bitcoin as its position will be unchallenged. It may also be affected if among those on the list being regulated is itself.

Margin issue after CME listing

Once Bitcoin is listed, margin stability may be an issue. Over the years, retail investors have been controlling the growth of Bitcoin.

After Bitcoin futures have been put out there, traders are going to be able to trade against them. This may lead to a destabilized margin at which values are going to fluctuate in a way that will make trading seem like gambling.

I mean, if you do not have a clue of what the result is going to be in the next two seconds, that is more of betting than gambling. This should have a really great impact on Bitcoin’s value.

However, all these risks are 50-50. To advance, sometimes you have to take risks. You do not want it to be the year 2020 and keep regretting why you never bought bitcoins 2 years ago.

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