Covid pandemic not only shook the world in terms of death and suffering, but it has also shaken many of the financial aspects in the world. The market has faced unbelievable changes, be it the stock market or the commodities market.
Although, to the surprise of millions of people, bitcoin has shown strong resilience against the dominant force of the global pandemic. Bitcoin not only stayed unmoved against the pandemic, but it also forced its way to cross significant barriers of value, making the price higher than ever in 2020.
Many bitcoin investors are buying bitcoin passionately and looking for ways like using crypto arbitrage VIP to double the amount of their bitcoin possession.
Although it was successful in 2020, there is no guarantee that it will succeed in 2021 or the coming year, 2022. This article contains five reasons that back up the fact that cryptocurrency will fail in the coming future.
Five Reasons For Not Investing In Bitcoin
Here are the five reasons to not invest in bitcoin –
1. Scarcity
The production of bitcoins is limited to the computer programming that produces bitcoin. Likewise, physical objects like gold and diamonds are limited because only a limited amount of those objects are buried on earth, making them scarce.
But the scarcity of bitcoins is a made-up perception. Allow me to explain why. First, since bitcoin has a great community, and millions of people are eager to invest in it, it is safe to say that bitcoin is not fragile from the users’ side.
Although with a strong community backup, programmers are not increasing the number of bitcoins. Hence, bitcoin’s scarcity is not natural; it’s made up.
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2. Bitcoin Has No Real value
To defend that bitcoin has real value, many say that the regular currency also does not have real value since it is not like gold. But the traditional or fiat currency has the support of the government which issues it.
Fiat currencies bear the assurance of their value from the government in writing on the coins and the notes. However, there are also multiple ways for governments to sell public assets, collect tax from people and businesses, and sell bonds to back up the regular fiat currencies.
These powers of the government make the value of fiat currencies almost incorruptible. But the cryptocurrencies have no such power or organization backing them up or their value. The fact that cryptocurrencies have no issuing authority makes it baseless.
3.No Stabilizing Force
The issuing authority of the fiat money has the power to stabilize it. Central markets can buy and sell their national currencies in the international monetary market; it’s a way to make the fiat currency stable. And there is no way for a currency to function correctly without stability.
But there is no stabilizing force for bitcoins.
4. Volatile
Bitcoin is highly volatile. No matter how many organizations promise to accept bitcoin for trade, no one will consider spending bitcoin for exchange. The current state of bitcoin sees it as a mode of investment; hence no one wants to use bitcoin to purchase anything.
Most people buy bitcoin expecting its value to rise in the future. Everyone wants to store bitcoins and expects the price to go upwards. But the price goes up and down drastically, making bitcoin an unstable currency.
5. Bitcoin Rivals International Currency
The supporters of bitcoins believe that cryptocurrencies will someday potentially replace the fiat currencies of different countries. But this is so unimaginable.
The powerful countries like China, the USA will never agree to cancel their currency and adopt cryptocurrency as their new currency. Since no one will have any authority over bitcoin, it is likely for all the countries to not allow bitcoin as the global currency.
China has already banned both the mining and trading of bitcoin, and many countries will also ban bitcoin soon.
Many countries are trying to develop their cryptocurrencies, and in the future, they will replace bitcoin with their cryptocurrencies.
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Blockchain Is Not Exclusive To Cryptocurrencies
Blockchain technology is already in use to create stable coins. Stablecoins are less volatile as they fluctuate only based on their underlying assets. Hence stable coins are safer than decentralized cryptocurrencies.
Since the stability of the stable coins is a much better option than the decentralized cryptocurrencies, no one will use bitcoin instead of the stable coins.
Conclusion
There are more than just five reasons for not using bitcoins, or bitcoin being the worst investment idea. First, many people will reject it because of its decentralized nature and the fact that it has no physical appearance.
What do you think? Is bitcoin a good investment choice? Or a bad one? Share your opinion in the comment.
