Bitcoin is often viewed as an investment option because its value has increased in the past. However, in any investment, there is always risk involved. You can check twitgoo.com for more info.
Bitcoin may not be the best savings option because its value is not always stable. For example, in January of 2018, the value of one bitcoin was around $14,000.
However, by December of 2018, the matter had dropped to about $3,500. This means that if someone had invested in bitcoin in January, they would have lost around $10,500 by December.
Another reason Bitcoin may not be the best savings option is that it can be difficult to access. For example, if somebody wanted to trade bitcoin, they would need to locate a purchaser willing to spend the current trading price. This can be difficult, especially if the value of bitcoin is low.
8 Ways How Bitcoin is not Considered as an Excellent Option for Savings
1. Volatility:
The Bitcoin price is highly volatile, and it can go up or down in a short period. For example, in January 2018, the value of one bitcoin was around $14,000, but by December 2018, its value had decreased to $3,700. This makes it a risky investment option.
2. Limited acceptance:
Many merchants do not accept Bitcoin as a form of payment which reduces its usefulness.
3. Lack of protection:
Bitcoins are not insured like bank deposits, so if your bitcoins are stolen or lost, you will not be able to get them back.
4. Complexity:
The buying, selling, and trading of bitcoins can be quite complex, making it difficult for beginners.
5. Limited supply:
The entire Bitcoin produced is restricted to 21 million, implying a finite quantity.
6. High electricity consumption:
Bitcoin mining requires a lot of electricity, leading to increased energy costs.
7. Risk of fraud:
There is a risk of fraud when dealing with bitcoins as there are many scams online.
8. Tax implications:
Bitcoin ownership may be complicated and varies by nation. For example, in the United States, bitcoin is considered property and not as currency which means that you will have to pay capital gains tax on any profits made from its sale.
Cryptocurrency is often considered a fast and convenient way to pay bills, send money abroad, and more, but the truth is that it’s not necessarily the best option in all of those situations.
Many businesses will only accept cryptocurrency if it has been transferred in a form that they can verify. Unfortunately, this usually means that sending money abroad is extremely expensive and time-consuming.
Read More:- What Is Bitcoin? How To Invest In It?
6 Ways How Bitcoin Can be Considered as a Good Option for Savings
1. Bitcoin is deflationary by design. The total number of bitcoins that will ever be created is capped at 21 million, which means that the value of this digital currency is likely to increase over time as it becomes scarcer.
In other words, if you invest in bitcoin now, your purchasing power will likely be more significant in the future.
2. Bitcoin is highly portable. Bitcoins can be stored on a computer or mobile phone and carried with you wherever you go.
3. Bitcoin is global. Bitcoins are accepted globally in virtually every country and easily exchanged for local currency.
4. Bitcoin is divisible. Bitcoins can be divided into smaller units (called satoshis), suitable for smaller transactions.
5. Bitcoin is deflationary. The total number of bitcoins that will ever be created is capped at 21 million, which means that the value of this digital currency is likely to increase over time as it becomes scarcer.
6. Bitcoin is highly portable. Bitcoins can be stored on a computer or mobile phone and carried with you wherever you go.
Despite these drawbacks, there are some benefits to using bitcoin as a savings option. For example, bitcoins can be stored offline, making them less susceptible to theft.
Conclusion
There are many reasons why bitcoin can be considered a good option for savings. It is deflationary by design, highly portable, secure, global, and divisible. As the value of this digital currency continues to rise, it is likely to become even more popular as savings.