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Why You Should Be Careful About Bitcoin

In a nutshell, bubbles always burst.
Why You Should Be Careful About Bitcoin

Bitcoin has scaled dizzying heights this week, scaling the C$16,000 mark. In anticipation of great riches, a Canadian couple poured their life savings into the cryptocurrency.

However, history has plenty of lessons for those willing to take a chance on what appears to be a new investment avenue.

READ ALSO: This Is How Much Money Valérie Plante Makes As Mayor Of Montreal

To begin with, like every bubble Bitcoin may be more of a speculation than an avenue of investment.

We have plenty of historical precedent to go by. In particular, the dot com bubble of the late 1990s and the tulip bulb craze of the early 17th century were both cases of booms that went bust.

Those were on firmer ground than Bitcoin, which is as yet an unknown commodity.

On the other hand, the fact that Bitcoin is decentralized might make it more advantageous. Indeed, its decentralization insulates it from macroeconomic risks associated with traditional currency. On the other hand, this lack of structure might make also give it an unwanted volatility.

At present, the cryptocurrency is still in an early stage of its development. The Internet is full of Bitcoin scams, and there are very avenues through which Canadians can engage in Bitcoin trade. 

Two Bitcoin exchanges based in Canada are Vancouver's QuadrigaCX.com and Toronto's Coinsquare.io. In addition, San Francisco's Coinbase allows Canadians to use their debit cards.

Canadians could also use Bitcoin ATMs. Most Canadian cities have one. A simple google map search can help you find a Bitcoin ATM in your city.

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