Bitcoins do not come
After rallying significantly since the beginning ofprices have now started crashing. Despite the rally in prices, many experts are not convinced that cryptocurrencies are the future. Pethe started small.
Bitcoin price is volatile
He was unable to execute the sell order smoothly. While this incident prompted Pethe to sell his bitcoin stash immediately and vow to steer clear of such investments in the future, cryptocurrency exchanges claim that around 2, new users in India are entering the market every day.
First, however, it is useful to back up a step. Bitcoin and other digital currencies have been touted as alternatives to fiat money. But what gives any type of currency value? Why Currencies Have Value Currency is usable if it is a store of valueor, put differently, if it can reliably be counted on to maintain its relative value over time and without depreciating. In many societies throughout history, commodities or precious metals were used as methods of payment because they were seen as having a relatively stable value.
But the number of investors is still growing, which is a concern. The value of the latter grew to around Rs 1.
Why does Bitcoin have Value?
He sold his bitcoin holdings immediately afterwards for Rs 19, and decided to stay away from such investments. After rallying significantly since the beginning ofand reaching an all-time high of Rs 3.
It dropped to Rs 2.
Should investors use this crash as an opportunity to buy into the market? Extreme volatility Investing in cryptocurrencies involves very high risk, as prices have been extremely volatile. Many experts are sceptical about bitcoin as an investment primarily because there is nothing for them to analyse.
People are therefore investing with imperfect information and joining the herd of speculators.
This might lead to formation of a bubble that will eventually burst and cause widespread losses. Neither commodity, nor currency The lack of clarity about its origin is another big issue related to bitcoin. In olden days, highly priced metals like gold, silver, etc. Sold one after a year at Rs 1.
She is now waiting and watching since the RBI has not legalised bitcoins. Someone is going to get killed.
So what should you do? In Pic: Priya Kulkarni 30, Pune Her bitcoin experience: She had been investing Rs 5, in bitcoins every month, because she was cautious.
The value of her investment has grown to around Rs 1 lakh. But she has now stopped the monthly investments and just monitors the performance.
An unregulated space Unlike other investment avenues, cryptocurrencies are not regulated by government entities or banks.
Securing your wallet
Jain School of Global Management. But if we get ripped off in a bitcoin transaction, it is impossible to get the money back. The issue of bitcoins do not come One major hurdle in the path of Indian investors who are interested in investing in cryptocurrency, is the confusion about its legal status. In Decemberthe RBI issued a press release cautioning users, holders and traders of virtual currencies, including bitcoins, about the potential financial, operational, legal, customer protection and security related risks.
In its latest press make money without investments quickly on the Internet dated 1 February,the regulator has further stated that it has not issued licences to companies for trading in any virtual or digital currencies.
RBI also added, that the user, holder, investor, trader, etc. The investment value has grown to around Rs 26, now. Ponzi schemes abound Aside from the operational issues of trading in cryptocurrencies, there is also a high risk of fraud.
Some companies claim to double the initial investment within a very short period of time.
Prakash Pillay learnt this the hard way. He invested Rs 5 lakh and accumulated 6.
Though he was able to recover Rs 3 lakh by selling one bitcoin in July, the company is no longer allowing him to sell the remaining bitcoins in his wallet. Instead, it is asking him to exchange them for MCAP, another cryptocurrency. In Pic: Prakash Pillay 38, Pune His bitcoin experience: Invested Rs 5 lakh in a bitcoin trading company which turned out to be fraudulent.
From his investment amount and reference bonus schemes, he had accumulated 6. Prone to illegal activity Due to the lack of government control, terrorists and extortionists are also utilising the cryptocurrency space to their advantage.
Kishore Jeswani, 50, fell victim to such hacking in September However, although Jeswani met their demands, they did not unlock his computer and he ended up losing his data anyway. This risk also lowers the chances of cryptocurrencies becoming mainstream in India, leaving the future of the market mired in uncertainty.
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