I think at this point we can all agree that 2020 was quite a tumultuous year with COVID-19, however, one investment had a very, very good 2020, and that was Bitcoin.
Bitcoin is said to be one of the best investments right now, even with its insane amount of volatility. Bitcoin enthusiast will continue to speculate that the digital currency is going to continue to skyrocket and becoming incredibly popular, however, no one actually knows what the future holds for Bitcoin.
Bitcoin is certainly something you can become rich from if you do it right, but you have to make sure you’ve done an adequate amount of research and are okay with the huge risk profile it poses. However, while Bitcoin is said to be an awesome investment, there are three ways you definitely shouldn’t invest in this volatile form of cryptocurrency, no matter how popular these options may be.
Grayscale Bitcoin Trust
This one may actually come as a shock because many people use and believe in it thoroughly, but it is actually a terrible way to invest in Bitcoin for many reasons. Basically, the one big problem with investing in Bitcoin with Grayscale Bitcoin Trust is the fact that it is likely always valued at a premium price which can be predominantly expensive most of the time. While it isn’t as crazy as it once was, it is still valued at an 11.7% premium to NAV.
Investors are already paying far too much to invest in Bitcoin, however, this is just making it a huge joke at this point which is incredibly disappointing to investors worldwide. It is easy to say that investing in Bitcoin via the Grayscale Bitcoin Trust isn’t the right move for any investors and there are certainly better ways to do it.
Riot Blockchain
Riot Blockchain uses a series of high-powered and highly intelligent computers to solve extremely complex mathematical equations and puzzles. These puzzles being solved helps to validate many groups of transactions on Bitcoins blockchains. This way, when a puzzle is effectively and correctly solved, the cryptocurrency miners, such as Riot itself, is given a large block reward of 6.25 bitcoin. As of Jan 19, this 6.25 bitcoin is worth more than $224,000 which is simply astronomical.
It is a pretty straightforward business model, but it seems as if not many people are happy with it for some reason. It is extremely competitive and is very much capital-intensive.
Bitcoin
Surely this doesn’t come as a surprise, but it is said that one of the worst ways to invest in Bitcoin is to buy it straight out from cryptocurrency exchanges. It isn’t something that Bitcoin enthusiast will openly admit, but their digital gold mine is jam-packed full of already existing and potential flaws throughout and it is fully fuelled by false scarcity. It is said that Bitcoin completely lacks game-changing utility which essentially makes it a terrible form of investment altogether.
Bitcoin isn’t unique at all and there is also essentially no barrier entry in developing blockchain. If you are looking for a reliable app for your trading, Bitcoin Up is one of the best and is certainly one of the more reliable things in the crypto world.
