Is the emergence of Bitcoin good or bad for the investor？

Is Bitcoin Good or Bad for the Investor?
Student’s Name
Institutional Affiliation
Is Bitcoin Good or Bad for the Investor?
Bitcoin refers to a form of new currency that was developed by an unknown individual; going by the nickname of Satoshi Nakamoto in 2009. It has been classified as a digital cryptocurrency that does not require middlemen such as banks to transact. Since its development bitcoin is starting to become formal following its usage in paying bills, shopping and other forms of online transaction. Bitcoin is also gaining ground because they are not tied to any regulation or controlled by any country, In addition, the use of bitcoin has become popular in shopping since they do not attract credit card fees. Also, people have started investing in bitcoins hoping they their prices will skyrocket. The price of bitcoin has grown from $1000 to $19000 within a period of 2 years. Today a single bitcoin is worth $8000. This is an indication that the coin is highly volatile, and making it a risky investment. For this reason, there has been an endless debate on whether bitcoin is a valuable investment or not. The answer to this question depends with whom you ask. The one with the vision of a covered future with the lack of centralized bosses becomes key to an asset value are likely to respond with a yes, whereas the group which has remained conventional and put more value in traditional trust will advise against investing in bitcoin. Consequently, bitcoin is not a good portfolio for investors due to its high volatile nature, the question of legality, its complexity, lack of regulation, and prone to illegality, and lacks identity.
Bitcoin’s extreme volatility nature renders it a very risky investment. Although other investment portfolio such stocks and bonds are volatile, they are not as volatile as bitcoin. Making an investment in digital currency involves a high level of risk because their prices are unregulated (Prypto, 2016). Investors are lured into the market by the high prices. For example, in December 2017 bitcoin hit its highest price ever, of $ 19000 (Taylor & Taylor, 2018). The prices later dropped abruptly causing many investors to lose their hard earned money. The virtual currency is highly volatile because it is unregulated, and the prices are majorly determined by the market forces that can be manipulated by unknown parties (Norman, 2017). The attractive price saw an increasing number of the investor as every people from walks of life was aware of this lucrative digital currency.
According to Coinbase, there was an 80% increase of bitcoin investors in the begging of the year 2018. Since then the price of bitcoin has been swinging uncontrollably. The price swing has even become more volatile after the trading community launched the trading of bitcoin in the two established U.S. exchange markets (Szymanski, 2018). The uncertainty of this virtual currency is highly unpredictable since there is no enough ecosystem surrounding to allow deep research on the currency (Szymanski, 2018). The coin is characterized by the unrealistic growth of prices that leads to the formation of bubbles that are likely to burst and cause massive losses for investors.
The question surrounding the legality status of bitcoin is one of the major hurdles for many potential investors who are contemplating in investing in the cryptocurrency. In as much as bitcoin has not be marked as illegal, it formality is still uncertain as it not recognized by the reserve bank of many banks, other financial institutions and the relevant authorities (Burniske & Tatar, 2017). For example, in November 2016, the U.S Financial Regulatory System issued a press release cautioning the American bitcoin users as well as traders and holders of other cryptocurrencies siting potential financial, customers protection, operational and security and legal consequences. Later in December 2017, the financial regulatory body issued a similar press statement that it has not granted licenses to any companies trading in cryptocurrencies (Burniske & Tatar, 2017). The body also added that any holder, trader, users, and investor of bitcoins and other virtual currencies will be doing so at their own risk. The Central Bank and Financial Regulators Body have neither approved nor banned any cryptocurrency, but they have voiced their concerns (Burniske & Tatar, 2017). Therefore, the legality of virtual currency is questionable and investors should trade in the path with much cautious.
Bitcoin operates on an unregulated platform and this risk to investors. Unlike other investment portfolios such as gold, stocks, and bonds, bitcoins are neither regulated by the government not banks and other financial entities. There is no physical authority that an investor can visit an...