For several years now, we’ve thought of Bitcoin primarily as a disruptive digital currency meant to provide an alternative means of cash or credit. Indeed, those who have made the effort to acquire Bitcoin can actually spend it at an increasing number of stores and online vendors that accept it as credible cash. However, last fall brought about some of the biggest Bitcoin-related news in some time when the Commodity Futures Trading Commission officially classified Bitcoin as a commodity in the U.S., as opposed to a currency.
This means that in the eyes of the CFTC (and one could say a growing number of American citizens as well), Bitcoin is more like oil or gold than the dollar or euro. And that means quite simply that it’s worth looking at not as something to spend or acquire on a day-to-day basis, but rather as something to invest in for the future.
But is Bitcoin a wise investment? Let’s consider some of the factors.
How The Price Is Trending
An analysis of price trends is up to each individual investor, and it requires careful scrutiny of patterns and indicators. That said, a basic look at Bitcoin’s price charts since the cryptocurrency’s inception reveals a mostly steady increase in value over the last 10 months or so. From $209.13 in late August 2016 (not too far from an all-time low), Bitcoin has risen to roughly $448. That doesn’t necessarily tell you what’s going to happen in the next six months or year, but it’s clear that the price has been trending up, and with perfect hindsight it would have been a profitable investment in 2015.
How You Can Store Bitcoin
When you invest in a stock or even a typical currency, you don’t tend to worry too much about the security of your holdings. That’s not to say you shouldn’t be concerned about it, but opening an account through a reliable broker generally frees you of worry about how secure your stock is. With Bitcoin, however, it’s up to you to keep tabs on your assets. So how exactly does that work? Well, in this overview of the cryptocurrency, it’s revealed that there are different types of Bitcoin wallet options. The idea is to think of a Bitcoin wallet as more or less a cryptocurrency bank account. Different types have different security features, meaning you can likely find an option that allows you to feel secure about a long-term holding.
What Analysts Are Saying
It’s not always good to blindly follow popular advice with regard to investment, and doing so with Bitcoin is probably a bad idea as well. Cryptocurrency tends to be very polarizing, and that means that two perfectly credible financial experts might have completely opposite opinions on where it’s heading. Still, it’s always worth reading through different takes on any investment so as to gain a broader perspective of what you’re looking at. Heading into 2016, Forbes gathered 10 reasons for and 10 reasons against Bitcoin investment, and while you might not agree with everything listed in those articles, it’s wise to take it all into account. In short, analysts as a whole are undecided (or rather
, in disagreement) about Bitcoin.
No one can absolutely or universally declare what may or may not be a wise investment. The same is true of Bitcoin, even as more people begin to look at it as a commodity rather than a currency. But at the very least it’s an interesting investment. Just make sure you educate yourself properly before making the decision to buy in.