7 Reasons You Shouldn’t Buy Bitcoin

7 Reasons Why You Shouldn’t Buy Bitcoin

If you have avoided it thus far, maybe you should really stay awayPhoto by André François McKenzie on Unsplash

The bitcoin bull is back. Of course, it’s not just going to skyrocket to $20k overnight. We might not see another all-time-high in 2019, but the bullish momentum is back again.

From late 2018 to early 2019, a lot of good news concerning the fundamentals of bitcoin and cryptocurrency began to surface. Some were so good that it was alarming how the impact wasn’t felt in the prices. But the bitcoin price has climbed by over $2k and it is staying afloat.

Finally, the buyers are trumping the “shorters”

Just in case you are new or wondering what the whole fuzz about bitcoin is (as you wondered in late 2017), this is a piece of information for you. If you have not put in some money into crypto all the while and you are thinking of doing that now, this is a warning for you.

For those who are veterans in the crypto world, who faced severe backlash in 2018 from people they encouraged into crypto, maybe you shouldn’t encourage anyone this time.

This is a list of 7 honest reasons why you should not buy bitcoin now. If you go through these reasons, and you are cool with it, you can go ahead to buy bitcoin. If you are not cool with one or more of the 7 reasons, just stay away. So, here we go.

Reason Number 1: The price of bitcoin is prone to a massive drop from time to time

Bitcoin (and other cryptocurrencies) have witnessed more than 80% drop in their value on the market. This has happened to bitcoin about 3 times. Although, over time, the price recovers and hits another all-time high. However, the periods of losses are always quite brutal.

If you cannot stomach such losses or you cannot wait it out, just stay away from bitcoin

Reason Number 2: Bitcoin is not an asset

An asset (in my own definition) is anything that puts money into your pocket. Likewise, a liability is anything that takes money out of your pocket. Bitcoin is neither. Bitcoin is better understood as a stronger alternative to cash. A store of value instead of fiat currencies like pounds, dollars and euros.

Owning bitcoin is not going to make you more money by default. This is unlike owning things like stocks which pays you dividends. People expecting to make money with bitcoin are either betting on its value increasing or decreasing.

Reason Number 3: Sending your bitcoins to a wrong address will make you lose it

Many people have lost their bitcoins due to mistakes such as these. They sent bitcoins to a bitcoin cash address. Just like that, your funds can be gone in one simple sweep.

If you are that clumsy with stuff, better just stay away from crypto for now. You can hang around and learn but don’t put in any serious money.

Reason Number 4: You need to invest in the safekeeping of large amounts of bitcoin

Bitcoins are often bought on an exchange. Most people keep their coins on the exchange. While this is not the best of safety practices, it seems okay if the exchange is quite reputable and the coins you own are not that much. If what you own is huge, it is important to get your own cold wallet and store your coins offline.

Reason Number 5: Mainstream market adoption is still far away

Today, the crypto world fondly talks about mainstream adoption. But the mainstream adoption becoming a reality at this time is the acceptance of cryptocurrencies as a financial instrument. The financial markets are now onboarding bitcoin (with considerations to add others). However, there is still a long way to go when it comes to spending bitcoin in the real world.

It will likely take some more years for bitcoin to become established in the real world as a medium of exchange. So, you can calm your nerves and wait for that time.

You don’t have to FOMO now

Reason Number 6: The true value of 1 bitcoin is 1 bitcoin

The question a lot of traditional investors often ask is, ‘what is the true value of 1 bitcoin?’ And when they do, they expect to get an answer in US dollars, Pounds or any other fiat currency. So, over the few years of Bitcoin’s existence, we have seen bitcoin at $10, $500, $1,000, $3.6k, $6k, $12k, $20k (in no particular order). Judging by the cost of mining, it should be difficult for bitcoin to go below $5k. But it has. This is because the price of bitcoin is dictated by the market forces from the buyers and sellers.

The fact is that the true value of 1 bitcoin is 1 bitcoin. Bitcoin is the future of money. When you buy bitcoin, you buy bitcoin. You can only decide when you sell or trade with it. You cannot really decide what the price will be in your local fiat currency at any particular time.

Reason Number 7: There are still regulatory challenges with bitcoin

And yes, there are still regulatory issues. The issue of ban or no ban has ceased a bit but there are still a lot of upheavals for bitcoin and other cryptocurrencies to climb before they become accepted fully by the governments as what they really are.

Some regulations already exist in some countries. While a number of the regulations are positive, others are hoped to be reviewed later by the crypto community. So, the regulatory challenge is still there and can send jitters to the market price of bitcoin.

If any of these reasons bother you, stay away from bitcoin for now. When the dust settles and bitcoin becomes as adopted as the other forms of money, you will be able to buy bitcoin and use it like everybody.

Finally, I hope you notice the points that were not raised. For example, the saying that bitcoin will go to zero. The possibility of bitcoin is already opened to the world. The world cannot go back to the period without bitcoin.

I rest my case

7 Reasons You Shouldn’t Buy Bitcoin was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.