When the mythical Satoshi Nakamoto created Bitcoin in 2009, people wrote it off as a flash in the pan virtual piece of nonsense that had no way of being able to sustain itself as currency. Fast forward nine years and Bitcoin is one of the most talked about financial topics of the twenty-first century. Alongside Bitcoin, hundreds of other cryptocurrencies such as Ethereum, Ripple and Neo have made a play to become a bonafide and worthwhile punt for investors. While Bitcoin has flourished, the market is still far from stable, and many well-respected investors still would not touch it with a barge pole. Why is this when the returns can be so lucrative and astronomical?
Quite simply, there is no regulation for the world of cryptocurrency. Rules are not present; there’s no transactional regulation and no legislation regarding Bitcoin. Lloyds in the UK went so far as to ban its credit card users from purchasing Bitcoin as they were worried that their consumers would be inadvertently getting themselves into debt. Without regulation, many financial experts see cryptocurrency as a huge gamble as there is no central authority overseeing transactions. This is why the anonymous nature of cryptocurrency is now being exploited by criminal gangs and cyber hackers. Cryptocurrency vaults and wallets have even been raided and Bitcoin stolen. As there is no regulation, there is no way for investors to get their money back.
For The Layperson
It is easy to invest in cryptocurrency. You don’t have to be an investment banker or hedge fund manager to get in on the action. Because of this, there has been a natural curiosity among novice investors willing to chance their arm. All you need is the best crypto wallet available in your country to house your currency and a broker. With Bitcoin ending 2017 on a high at nearly $20,000 after starting the year at $1000, you can see why people may start taking notice of this potentially lucrative investment opportunity. Nevertheless, take a look at the value of Bitcoin at the time of writing this article and nearly $10,000 has been wiped off the end of 2017 high point. It is this roller coaster fluctuation that could see many amateurs falling into debt and losing money.
Not all professional investors steer clear of cryptocurrency altogether. Rather they utilize it as a high-risk investment as part of a wider portfolio of investment opportunities for clients. Any responsible investor should have a solid mix of low, medium and high-risk ventures that they invest their money into. By using Bitcoin as one of these investment options, professionals can take a foray into the cryptocurrency world without putting all of their financial eggs in one basket.
The world of cryptocurrency needs regulation. Whether this will take the unique shine off of the investment opportunity is yet to be seen. While interest shows no sign of abating, neither does the volatility within the market. The Bitcoin revolution will remain a financial gamble for many years to come.