Is there a risk in investing in Bitcoins?

Bitcoin was never designed for a typical equity investment, in 2011 and 2013 when digital money was being appreciated rapidly, so some speculative investors were drawn towards it. Hence, people don't purchase bitcoin as a medium of exchange, but its investment value is the element that attracts people.

But this doesn’t mean that investing in bitcoins isn't risky, and Bitcoin carries several inherent risks due to the lack of guaranteed value digital nature. Some agencies, like the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Consumer Financial Protection Bureau, have issued many investor alerts.

There isn’t a long term track record or history of reliability for bitcoins, the concept of virtual currency is still delicate, and most people don't trust it as they believe the regular traditional currencies. Bitcoins are becoming less experimental each day due to there increasing popularity day by day; it is a development phase and is continuously developing even after more than ten years of existence.

Security risks of bitcoin

The most number of people who are currently using or owing Bitcoin hasn't obtained their tokens through mining. Instead, they prefer to buy and sell bitcoins on popular online bitcoin trading markets known as Bitcoin Exchanges. The exchanges are happening entirely digital. Hence, they are at risk of hackers, operational glitches, or malware. The bitcoin could be transferred to another account by a thief if he got access to the bitcoin owner's computer, his hard drive, and his encryption key. But there is also a solution for this, by storing the bitcoins in a computer which is not connected by the internet, or by using a paper wallet, or by simply keep track of there computer and using it safely without getting a victim of a hacker or malware, keep all the information safe and not to share with anyone.

Bitcoin fraud risk

The Bitcoin uses private key encryption for verifying the owner and to register their transactions, selling of false bitcoins may be attempted by scammers and fraudsters. As for example in 2013, legal action was taken by the SEC against an operator of Bitcoin which was related to the Ponzi Scheme.

Bitcoin market risk

Like with any other investment we make, bitcoin values can also fluctuate. Indeed, wild swings have been seen in the currency’s price over its short existence. These digital currencies may become worthless an lose the value totally if fewer people began to accept bitcoin as a currency. Bitcoin has gained massive lead among the other hundreds of other digital currencies that have come into existence in the past few years, thanks to its brand recognition venture capital, but money in a virtual form is always a threat, it will always ahs its cons and still has its pros.

No tax risk

The tax-advantaged retirement accounts don't include bitcoin, so for shielding investments from taxation, there is no better legal option. You can invest in bitcoins using Profit System App

Bitcoin forks

Since Bitcoin launched, there are many cases in which the disagreements between the factions of miners and the developers have made some large scale splits of the cryptocurrency community. Groups of bitcoin users and miners have totally changed the network of Bitcoin Protocol itself in some cases. This process is termed as 'forking', and this usually ends up in the creation of a new type of Bitcoin with a new name to it. This split is later divided into two primary forms as "hard fork" and "soft fork". In a hard fork, a new coin shares a transaction history with the Bitcoin until a particular split point, where a new token is created. Some examples where new cryptocurrencies have been created because of the hard fork are Bitcoin Cash, Bitcoin Gold, and Bitcoin SV. A soft fork is a split where the new protocol complies with the previous system rules.

Conclusion: Bitcoin is an emerging form of cryptocurrency, which is improving day by day, the bitcoin network is well protected and heavily peered so you can trust the network completely, but everything has an advantage and disadvantage, even paper money has disadvantages. So, if you have high profits due to Bitcoin, then you have to take some risk with yourself from the start.