If you are thinking of buying Bitcoin, this is the opinion of the experts!

The price of Bitcoin hit a record high of over $ 41,000 on Friday, according to CoinDesk, with its market value now standing at over $ 700 billion, and as a result, it pushed the value of the entire market by. cryptocurrency to over $ 1 trillion for the first time.

“It’s likely to hit $ 100,000, then $ 150,000, then $ 200,000,” said Social Capital founder and CEO Shamath Balihabitiya. “How long? I don’t know, I don’t know. [ربما] Five or 10 years, but she will go, “according to” CNBC “and seen by” Al-Arabiya.net “.

With all the hype, a lot of people are wondering if they should invest in Bitcoin, despite the fears surrounding it, as some fear this rally is just a bubble, as well as the risks of fraud.

Is Bitcoin Risky For The Average Investor?

Compared to most investments, Bitcoin is “an extremely volatile and risky investment,” said James Ledbetter, editor of the Financial Technology Bulletin, FIN, noting that given its historical price movements, Bitcoin is volatile, according to CNBC . Arab.net “.

The price of Bitcoin rose from the $ 20,000 level in 2017, losing a third of its value in one day and continuing to decline to the $ 3,122 level in 2018, as it rose from levels below $ 8,000 in 2020 to more of 30,000 USD.

Investor Mark Cuban compared Bitcoin to gambling and advised investing as much money as possible that could be lost in cryptocurrency.

Anthony Pomplano, co-founder of Morgan Creek Digital cryptocurrency hedge fund, added that the advantage of Bitcoin is its fragmentation into smaller currencies called ‘satoshis’, indicating the need to start with a very small size that you can learn.

Pomplano believes that Bitcoin is a good long-term investment, especially with a limited supply, so the increase in demand will necessarily affect the price.

Are Bitcoin “wallets” safe?

In July, several celebrity Twitter accounts, including those of President-elect Joe Biden, former President Barack Obama and Tesla CEO Elon Musk, to name a few, were hacked as part of the ‘a Bitcoin scam. As a result, hundreds of thousands of dollars have been converted from Bitcoin under false pretenses.

“I always remind people that Bitcoin literally has a ledger,” explains Pompigliano. In addition, it is extremely difficult to hack Bitcoin using the blockchain.

For his part, Wall Street Journal market correspondent Paul Vigna said, “To hack Bitcoin you will have to take control of the network, take control of the network, you will need your own network of computers that run 24 hours. 24/7, and it will cost billions to do that. Dollars. “

Ledbetter also noted that traditional stock accounts with brokerage houses can also be hacked. “There is always a potential for fraud or security risks.”

Can Bitcoin be easily converted into fiat currency?

Currently, most traditional Bitcoin transactions are done by converting Bitcoin into fiat currency, such as the US dollar.

For example, PayPal announced that in 2021, consumers will be able to use cryptocurrency as a “source of funding for purchases”. But what this really means is that when a user pays in Bitcoin, it will instantly be converted to fiat currency and the transaction with PayPal merchants will be settled in fiat currency, according to the PayPal site.

So far, the process of transferring Bitcoin to other accounts and converting them into different currencies, be it US dollars or some other cryptocurrency, is considered “cumbersome” and takes a lot of the time, according to broadcaster, “CNBC”, adding that it is often used in day-to-day transactions. There will be additional charges.

Is Bitcoin a Bubble?

While Rosenberg Research Chief Economist David Rosenberg believes Bitcoin to be the biggest bubble in history due to its tremendous price growth in a short period of time,

Bitcoin bulls say the 2017 rally was different because it was driven by speculation from individual investors, while the current rally is driven by institutional investors buying the coin.

Bitcoin has recently gained support from larger investors, such as Paul Tudor Jones and Stanley Druckmiller. And notable financial companies, such as PayPal and Fidelity; And Square and MicroStrategy, which used their balance sheets to buy Bitcoin.

In 2018, legendary investor Warren Buffett said, “When it comes to cryptocurrencies in general I can almost say with almost certainty that they will end badly.

Can bitcoin be used as an inflation hedge?

Those who advocate for Bitcoin often say that it is a hedge against inflation and the US dollar, and that it will survive any economic collapse or infrastructure collapse, compared to the gold.

“If you think about the structure of every single currency in the world, it is inflationary and controlled by governments,” Pompigliano says. “And these governments have very small groups of people who make the decisions about what happens to this currency.”

Bitcoin’s limited supply is considered the greatest protector of its purchasing power.

Indeed, like gold, “there is no doubt that Bitcoin can be a means of hedging against inflation, depending on the period of time of purchase and its holding or selling” , according to Leadbetter.

American billionaire Mark Cuban told Forbes: “It doesn’t matter what my lover wants [بيتكوين] By claiming it is protection against doomsday scenarios, it is not. “