Can You Lose All Your Money in Bitcoin in 2021?

0

If you are following recent news related to the market of cryptocurrencies, then you know about new records in prices of Bitcoin. The record-breaking value was reached in February 2021, when the price of BTC was over $57,000, while the current price is around $51,000. It is holding a relatively high value of over $50,000 for a few months, and many experts think that it could become even higher by the end of the year. Therefore, it is not a surprise that the popularity became even higher as well, especially among big investors. The most popular name that recently decided to join the Bitcoin community is Elon Musk who invested over $1,5 billion in this blockchain. Big companies for transactions and online shopping, PayPal and eBay, are also started accepting BTC as a payment option. According to some predictions, the price of this virtual currency might reach a value of over $100,000 by 2025.

These are some of the main reasons for the popularity of this digital asset as an investment option. If you are interested in trading with cryptocurrencies, visit blockchain.news, where you can learn more about the most efficient methods of trading like HODling, hedging, and more. Moreover, it is very important to learn about various factors that could influence the prices of digital assets. One of the main features of this market is high volatility, which makes it so attractive to investors in the first place. However, it is crucial to determine the right moment for the investment to have improved chances for profit.

Furthermore, we have to mention that there are still many suspicious people when it comes to investing in this cryptocurrency. The main reason is related to the situation from 2017 when BTC has reached the record value of near $20,000. However, the prices have dropped significantly after that, and the price fell to near $3,000 by the end of 2018. Many investors bought it while the price was $20,000, and those who decided to sell it before it starting gaining value again in 2020 have lost a lot of money. Therefore, there is a fear that the same situation might occur again.

Source: Medium

What Determines the Price of BTC?

Many factors are influencing the ups and downs of prices on the market. When it comes to Bitcoin, one of the main factors is supply and demand. When the demand is as high as it is in recent years, it is natural for the prices to become higher. Also, we have to mention the mining process, which is getting more complicated over time. Since making one unit is harder after the last mining, and will continue to be more complicated in the future, it can also influence the value. Furthermore, the overall popularity and acceptance are also important, especially when it comes to big companies that accept e-wallet as a payment option. Besides that, we have to mention the official regulations, laws, global economy, and other international factors.

One of the main reasons for creating this blockchain was to get a stable and decentralized network that is not controlled by any financial institution where investors can protect their assets in case of recession and high inflation rates, which was the case in 2008. The world is having struggles in recent times as well since we are still dealing with the pandemic that is creating serious issues for the global economy. According to many financial experts, there is a high chance that the world will face another recession, and investing in Bitcoin is an excellent solution for securing your assets.

Source: Medium

What Are the Predictions?

The main issue related to predictions is that you can find numerous articles, and you can notice that many of them are saying how the value will become higher. However, you should find relevant sources where you can learn more about this market, and follow the news about the factors that could affect it in any way. Many reliable sources prove how Bitcoin indeed has the potential to become four or five times more valuable in the next few years, but there is always a chance for some new situation that can affect the market, and cause a drop in the value, or even higher price.

There are still some countries where Bitcoin and other cryptocurrencies are illegal, but those economies are not so powerful to affect their value. However, if some highly developed countries like Japan, Germany, or the United States decide to make it illegal, the price will immediately lose value, or even become worthless over time if the trend of banning continues among other countries. However, when we look at the current trends, the chances for such a scenario are very low. Many countries are planning to find a way to implement the blockchain in their monetary systems by introducing new regulations where they could charge people with taxes when they are using e-wallets for transactions. Also, we can find ATMs with blockchain support in almost every bigger city.

Source: Computerworld

Conclusion

There is always a risk when you are investing in a market with high volatility. However, you should know that the chances to lose all your money by investing in BTC are very low, even impossible at the moment. You could lose some percentage of your investment if this unit loses its value, but it currently seems much more stable than in previous years, with a huge potential to continue its growth. Still, you should learn more about the main trading processes, and avoid risking too much by investing more than you can afford. The same as it is with the stock market or any other sort of investments.

There is always a risk of losing the money, but when we look from the current aspects of the market, the popularity of this virtual asset, and the fact that more companies are starting to accept this advanced model of payment, chances for making a profit are much higher than losing the investment.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

8  +    =  15