Dear Reader,
Bitcoin and other cryptocurrencies investing is often cited as a risky investment by many analysts, portfolio managers and regulators.
Yes, if one invests in Bitcoin and other cryptocurrencies, even in a diversified way, there is a non negligible chance that one can loose the whole of one's initial investment. If an investor invests in a diversified stocks portfolio, especially in large capitalization stocks traded on large countries' regulated bourses, it is very unlikely that he or she will loose the whole of their initial investment.
Since cryptocurrencies do not participate in the capital structure of a company, they are not entitled to any proceeds in the event of the related company's bankruptcy. In addition, common stocks listed on exchanges have been around for hundreds of years, are duly regulated, accepted by the public and regulators. There is virtually no chance investing in common stocks could be outlawed. There is, of course, the catastrophic risk of a global scale natural disaster or large scale nuclear war, the ensuing of which could wipe out the value of commons stocks completely.
Bitcoin and other cryptocurrencies, however, are a new financial instrument, their regulation is either nonexistent or nascent. Governments are not yet still 100 % sure if cryptocurrencies' benefits outweigh their costs. So there is still the relatively significant risk that governments through their regulating bodies could ban cryptocurrencies, which would bring Bitcoin and other cryptocurrencies' value to zero.
In short, when investing in cryptocurrencies one has to be mindful.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Respectfully yours,
Petar Posledovich
No comments:
Post a Comment