Bitcoin as an Investment Tool
Nowadays, it’s hard to say what’s the best way to invest. The financial crisis of 2008 has taught people that even large, respectful and old finance institutions ― like Lehman Brothers ― can be demolished in quite a short period of time. It shows that nothing is safe, not even banks and rich multinational corporations. Well, why not to try Bitcoin?
It was just invented in 2008 and seemed to be just a joke. Nevertheless, today bitcoins are becoming more and more attractive as a financial tool for people who feel good about risk and are trying to diversify their portfolio.
A New Trend is Coming
Bitcoins are more risky, but at the same time, they are potentially a more profitable asset. Common people are interested in digital coins because it is free currency without any ruling. There is no official, no government, and no central bank that backs it. Even its creator, Satoshi Nakamoto, is kind of a mysterious person, which makes it more interesting and popular. Bitcoins were not made simply for their revolution in the field of finance and economy, but also because it’s harder to discover a user. People like the fact that a bitcoin owner becomes ‘its own bank,‘ allowing individuals to issue and store their treasures by themselves. This has made them popular and well-known by people around the globe.
But financiers and economists are not common people. Hedge fund owners and financiers are looking for something that will give them a new, good tool for making more money. Digital or not, it doesn’t matter. That’s why today, cryptocurrency is developing extremely fast. As a result, bitcoins can now be sold and bought on the public market.
Bitcoin Investment Trust
One big company called Bitcoin Investment Trust () has been allowed to use the public market to sell its shares.
One main problem that bitcoin owners face is that it’s impossible to get money back if it’s stolen from an online or offline wallet. Customers know well about the accidents that occur when hackers access online wallets and steal all of a client’s money without any hopes of it being returned. Professional financiers, especially if they use big sums of money, just cannot afford to rely on such a risky asset. They need some type of a guarantee. BIT gives them one. Being on the public market, BIT offers to buy a share, which is equal to approximately one-tenth of a bitcoin. So, buying a BIT share, a customer doesn’t exactly get bitcoins, but an obligation by BIT to provide clients possession of this cryptocurrency. It becomes more similar to a banking system. If some of BIT’s bitcoins are stolen by someone, BIT’s customers save their funds and assets anyway. This makes it safer. And if it becomes more safe, it will become more popular among professionals very soon.
While the bitcoin economy is growing and is making new achievements, individuals are trying to earn some money at their own risk, instead of keeping it in a bank account. This can be dangerous for savings, especially when all your eggs are put into one basket. In fact, it works for any kind of investment, but bitcoins are highly vulnerable to bad news. Its prices surge to really high rates and then fall down to a deep drop. Jack Tatar says he’s lost about half of his savings in digital currency. He was quite smart not to invest all his money into one asset, so he didn’t lose a lot. Though, he is pretty sure about Bitcoin’s future and thinks it’s going to be bright.
Well, as a financial tool, Bitcoin is still very risky. Nobody knows exactly whether cryptocurrencies will work for a long period of time. It probably will collapse in four to five years, or maybe it’ll bring fabulous wealth to current investors and coin owners. In any case, Bitcoins needs to be more predictable and stable. This will give them a real way to become a wide-spread investment tool for the whole world.
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