Betting On Bitcoins? Here’s Why You Should Reconsider

Must Read

Intel Unveils Its Participation In The Ant Blockchain Ecosystem

According to recent reports, the world’s largest and highly valued CPU manufacturer Intel has unveiled its participation in...

Binance Exchange Is Facing User Rights Protection Issues in China

The leading crypto trading platform, Binance users, alleged to appeal their rights visiting Binance offices in Shanghai. As...

Top Stocks To Benefit From The 5G Technology Boom

5G technology, besides advancing companies, offers the best investment opportunities through stocks that are involved in this pioneering...
5d946d8cbd798-bpfull
Umme Haani
Umme Haani is a writer for Thecoinrepublic. she contributes a researched piece on cryptocurrencies and updates. Umme is an aspiring engineer who immensely enjoys writing and technical writing brings the best of both worlds under one roof for her.

It’s a well-known fact that investing your money not saving it makes you rich. However, if you want to make investments that are relatively risk-free then bitcoin is probably not for you. The recent QuadrigaCx scandal is a hint at the chaotic progression of the financial future of cryptocurrency. You’d be much better off spending your money gambling than with investing in bitcoins and cryptocurrency that is highly volatile.

Although the returns may seem high to the potential investors, the volatility i.e., the risk involved in investing in bitcoin is not often taken into consideration. Here is a comparison of one of the stock market investments vs. cryptocurrency investment risks.

Over the past five years, the S&P 500 – a stock market bellwether – has delivered an average annual return of 11.5 percent, with a standard deviation of 11.25. In any given year, the S&P 500 has a 95 percent chance of returning between -11 percent and +34 percent.

Over the past five years, the Grayscale Bitcoin Investment Trust has delivered an average annual return of 60 percent, with a standard deviation of 81. That means that, in any given year, Grayscale’s Bitcoin fund has a 95 percent chance of returning between negative ~100 percent and +222 percent.

A plausible explanation for the rapid hikes and drops in bitcoin would be the fact that retail investors (investors that have small amounts invested in bitcoin) cause bubbles and the value drops rapidly if the institutional investors(investors who either mine bitcoins or have bought large amounts of it) start actively participating. Other factors also include high-security risks, the uncertainty of bitcoin’s future and the fact that bitcoin is very much like gold and its value often fluctuates.

Thus, with all the above conclusions, it could be said that investing in bitcoin is not the ideal choice for anyone who is looking to create assets for themselves in this domain with calculated risks because of the high unpredictability of bitcoin value that can fluctuate within moments.

Advertisement

Advertisement


Hot News

Intel Unveils Its Participation In The Ant Blockchain Ecosystem

According to recent reports, the world’s largest and highly valued CPU manufacturer Intel has unveiled its participation in the ant blockchain ecosystem. The...

Binance Exchange Is Facing User Rights Protection Issues in China

The leading crypto trading platform, Binance users, alleged to appeal their rights visiting Binance offices in Shanghai. As a result, the right defenders...

Top Stocks To Benefit From The 5G Technology Boom

5G technology, besides advancing companies, offers the best investment opportunities through stocks that are involved in this pioneering technology. Another big firm that...

Stellar Lumens (XLM) Price Analysis: Bears Enforced XLM Price To Reach Support Level Of $0.060

Stellar Price is suffering major price corrections due to the overall downtrend in the cryptomarket.  Currently, it is facing an overall loss of -1.78%.  ...

Ethereum (ETH) Price Analysis: ETH Again Fails In Sustainability at $200

The bears are showing no mercy for ether price as it is reaching the crucial level of $198 It is also facing significant...

Ethereum Classic Claims to be the Only Secured PoW Smart Contracts Platform

Ethereum Classic (ETC) is a decentralized blockchain platform. It is a hard fork of Ethereum that lets anyone create and use Dapps. In...

Partners

Binance Exchange Is Facing User Rights Protection Issues in China

The leading crypto trading platform, Binance users, alleged to appeal their rights visiting Binance offices in Shanghai. As a result, the right defenders...

Top Stocks To Benefit From The 5G Technology Boom

5G technology, besides advancing companies, offers the best investment opportunities through stocks that are involved in this pioneering technology. Another big firm that...

Stellar Lumens (XLM) Price Analysis: Bears Enforced XLM Price To Reach Support Level Of $0.060

Stellar Price is suffering major price corrections due to the overall downtrend in the cryptomarket.  Currently, it is facing an overall loss of -1.78%.  ...

Ethereum (ETH) Price Analysis: ETH Again Fails In Sustainability at $200

The bears are showing no mercy for ether price as it is reaching the crucial level of $198 It is also facing significant...

RELATED NEWS

Intel Unveils Its Participation In The Ant Blockchain Ecosystem

According to recent reports, the world’s largest and highly valued CPU manufacturer Intel...

Binance Exchange Is Facing User Rights Protection Issues in...

The leading crypto trading platform, Binance users, alleged to appeal their rights visiting...

Top Stocks To Benefit From The 5G Technology Boom

5G technology, besides advancing companies, offers the best investment opportunities through stocks that...