Apr 26, · BitDroplet is a relatively new platform that allows users to invest in Bitcoin with small investments they call it Systematic Purchase Plan (SPP). BitDroplet is a product of famous Indian cryptocurrency exchange BitBns which was started in As mentioned on the Bitdroplet website, users can start with only INR 78 (~$1) per day. Oct 17, · Today, bitcoin serves as the intermediary asset on a number of crypto investment platforms if you want to purchase a less-common token (i.e., . Oct 27, · Coinbase is the biggest and most respected Bitcoin platform in the United States. It offers both an exchange and wallet in one, making it one of the easiest places to start with Bitcoin. Coinbase also supports Bitcoin Cash, Ethereum, and Litecoin.
Best platform to invest in bitcoinsIs Bitcoin a Good Investment? • Pros & Cons in • Benzinga
Today, bitcoin serves as the intermediary asset on a number of crypto investment platforms if you want to purchase a less-common token i. But as good as bitcoin has been for investors in , my blunt opinion is that it's a terrible investment. Here are 10 reasons you should avoid bitcoin like the plague. First of all, bitcoin is only as scarce as its programming dictates. Whereas physical metals, such as gold, are limited to what can be mined from the earth, bitcoin's token count is limited by computer programming.
It's not out of the question that programmers, with overwhelming community support, could choose to increase bitcoin's token limit at some point in the future. Thus, bitcoin offers the perception of scarcity without actually being scarce.
The king of cryptocurrencies also has a utility problem. To date, only Even considering the fact that fractional token ownership exists, roughly 10 million to 11 million tokens in circulation aren't going to go very far. There's minimal utility here. Bitcoin may enjoy first-mover advantage at the moment, but the barrier to entry in the cryptocurrency space is especially low.
All it takes is time and coding knowledge for blockchain -- the digital and decentralized ledger that records transactions -- to be developed and a digital token to be tethered to the network. There's nothing unique about bitcoin's underlying blockchain that other businesses couldn't one-up.
Another beef with bitcoin is that there's no tangible way to value it as an asset. For instance, if you want to buy shares of a publicly traded company, you can scour income statements, its balance sheet, read about industrywide catalysts, and listen to management commentary from recent conference calls and presentations.
In other words, you can make an informed decision. With bitcoin, there is no tangible data for investors to wrap their hands around. There's transaction settlement times and total circulating token supply, but neither of these figures tells us anything about the value or utility of bitcoin.
I believe investors are also placing their faith in the wrong asset. Over the long term, blockchain technology is where the real value lies. Blockchain can be used to reinvent supply-chain management and expedite overseas payments. But when folks are buying into bitcoin, they're gaining ownership in digital tokens with zero ownership of the underlying blockchain. To build on this point, companies are also testing blockchain that's tethered to fiat currencies.
A sixth issue is that blockchain is still years away from gaining real relevance. Three years ago, when blockchain companies and cryptocurrency stocks were the hottest thing since sliced bread, it was expected that blockchain technology would be quickly adopted. Little did investors foresee the Catch that would arise. Specifically, no businesses are willing to make the costly and time-consuming switch to blockchain without the technology being broadly tested -- yet companies aren't willing to make this initial leap to test the technology and prove its scalability.
By no means are cryptocurrencies the only asset to be hacked by thieves, but there are serious fraud and theft concerns that accompany bitcoin. For instance, novice bitcoin investors may not understand the need to store their tokens in a digital wallet, thereby leaving them susceptible to theft by hackers. Additionally, it's been hypothesized by numerous blogs and publications that North Korea has turned to bitcoin mining and theft to funnel money into its isolated economy.
Bitcoin is commonly viewed as the "currency" of choice for criminal organizations. Bitcoin is also an unregulated asset. Though this lack of regulation is actually a selling point for today's crypto investors given that it provides some degree of anonymity, it's bad news if something ever goes wrong. Since the majority of cryptocurrency trading and transactions occur outside the borders of the United States, the Securities and Exchange Commission is very limited in what it can do if your digital tokens are ever stolen.
The Internal Revenue Service expects you to report capital gains and losses tied to investment activity, as well as gains and losses associated with purchasing goods and services. Cryptocurrency investing is speculative. Prices are extremely volatile, and the risks are distinct from investing in conventional assets. For example, the currency is typically stored in a digital wallet — and that means it may be stolen by savvy hackers.
At present, Robinhood is the only broad investment app that offer users the opportunity to invest in cryptocurrency. Most states, although not all, allow commission-free investing in crypto with the Robinhood app. This lets users buy and sell:. Robinhood is appropriate for investing in specific crypto assets, but not for using the digital currency to buy goods and services. But, unlike Robinhood, these apps trade crypto only, not other types of investments. Arguably, the most popular bitcoin exchange is a full-service cryptocurrency firm.
Before investing in crypto, there are a few preliminary steps to take. Coinbase offers a digital wallet, and the crypto secured on their servers is protected by their insurance policy. Their process is simple — create an account, link your bank account, and begin buying and selling. Coinbase has a large base of available crypto assets for trading, as well as a library of education resources.
As with any investment, investigate the fees before selecting a crypto exchange. Coinbase has been charged with having higher fees than some competitors. Other competing and popular digital investment platforms include Kraken, Coinbase, Cash App and Binance. Exchange-traded funds have made investing in a variety of assets as easy as buying and selling a stock online. The Securities and Exchange Commission is moving slowly with this new asset class. Unfortunately, at present only institutions and enormous investors can participate in the following cryptocurrency funds.
Coinbase offers an index fund with exposure to four of the largest digital currency. In the meantime, smaller investors can purchase blockchain ETFs. These funds invest in companies involved in developing and using blockchain technology. They also track the performance of Bitcoin or other cryptocurrencies through futures contracts or by owning the underlying currencies. Like any other investments, do your homework before investing.
Understand what you are investing in as well as the risks and returns. With speculative investing, it is wise to invest only a small portion of your net worth.
Barbara A. Friedberg, MBA, MS is a veteran portfolio manager, expert investor, and former university finance instructor.