(a) Buying Bitcoin is easier but when you are going to sell it to get the hard cash that is the time, you will hit the real hard wall. Bitcoin has a complex encryption system to protect it from being hacked which is good for the crypto currency but despite that half of the bitcoins have been stolen from the wallets and exchanges and never recovered.
(b) Only people hallucination backs the bitcoin.
(c) There is a report that around 1000 people own 40 per cent of all Bitcoins. And these people are artificially keeping bull run of Bitcoins going by not selling them.
(d) You might be undertaking the transactions in a non legal way and tax authorities may soon catch up with you. The money entering Bitcoin is mostly hawala money or drug maphia lords money.
(e) Lastly, wide gap between buy and sell price suggests that liquidity is poor.
Even Warren Buffett has also asked investors to stay away from it and his thought process is reflected in the following write up on the issue. Buffett thinks coin offerings will end badly. “People get excited from big price movements, and Wall Street accommodates,” he said. Check how Bitcoin can make a monkey out of You here.
“It’s a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it. I hope bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view.”
Bitcoin, the mother of all digital currencies, currently trades at around $5,700, with a market cap now surpassing $90 billion. Still, Buffett remains skeptical, saying: “You can’t value bitcoin because it’s not a value-producing asset.” He added that there’s no telling how far bitcoin’s price will go and described it as a “real bubble in that sort of thing.”
So, keep away from this mad virtual currency and it may rise further also as their is no end to greed. However, if it is your hard earned money keep it safe and donot get carried away by greed factor. People may say you that I told you to buy at $3000 mark and now it is $17000 and it may even hit $40000 mark but it is better to be safe than sorry as no tool exists to arrive at a correct value of Bitcoin.
You can understand all about Bitcoin mining here and can understand that how a small policy change affects Bitcoin rate here. Lastly Bitcoin traders have started getting income tax notices here
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