For those of you wondering what a Bitcoin is, I will first explain. Bitcoins are an internet currency that recently increased dramatically in popularity. Bitcoins can be traded like standard currency or mined, which can be explained here. It has recently been involved in online black market drug trading and other scandals as they are untraceable. Unlike standard currency, more Bitcoins cannot be produced so there is no inflation. However the question that stood out to me was ‘Is this a viable investment?’
Investing in Bitcoin is a high risk high reward strategy. Horror stories of investors losing large sums have already emerged because stock price fluctuates massive amounts. I personally believe it is way too risky of an investment for multiple reasons. First Bitcoins are subject to being hacked and stolen online. No matter how well your Bitcoin wallet is encrypted there is always a possibility of being robbed. Second when investing in a commodity such as the Bitcoin, one does not receive anything physical. The difference between investing in gold and investing in Bitcoins comes down to their exit strategies. If gold were to fail it could still be used for jewelry to re-coop profits; Bitcoins nothing.