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. Bitcoin was never designed as a normal equity investment. Some people were drawn towards the investment value of bitcoin rather than using it as a medium of exchange. The digital nature and lack of guaranteed value of bitcoin always appear as the inherent risks in investing in bitcoins. Alert issues have been raised by many organizations such as Security and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA) and few other agencies.
- Bitcoin was created in 2009. Since all these years, bitcoin does not have much of a history of credibility. It means that it does not give complete assurance to the investors.
- The bitcoins have been created eight years back but it still does remain in the developmental phase. It is still evolving.
- It is said that “It is pretty much the highest risk and the highest return investment that one can possibly make.
- Bitcoin can be used for black market transactions, money laundering, illegal activities, and tax evasion. Most governments tend to ban the use of bitcoin.
- Since Bitcoin is completely a digital asset, the risk from hackers, malware and operational glitches is always at the top.
- Bitcoin exchanges and accounts are not secured by any governmental program.
- Sometimes there is a risk of fraud in bitcoin exchange. Fake bitcoins can be sold by fraudsters and scammers.
- Like every other investment, the price of Bitcoin is always on fluctuation. Therefore, the prices can fall down anytime.
- The tax on bitcoin investment cannot be shielded by any means.