Title: Is Bitcoin Worth Your Investing Energy?
It’s likely that you’ve noticed that Bitcoin isn’t going away. We’re now a few years removed from its remarkable peak in market value and subsequent crash, which basically means that both proponents and naysayers have seen their views validated at one time or another. At the outset of 2016, Bitcoin has stabilized fairly reliably at a value above $250, and as of this writing is actually at its highest point since mid-2014, at roughly $451. But the question for a lot of casual observers remains: is this digital currency really worth our investing energy?
For many early Bitcoin proponents, this actually isn’t a relevant question. People in that camp still see Bitcoin as a practical, useful currency that will one day be akin to ordinary money and useful in everyday transactions. But a lot of financial analysts in the U.S. tend to disagree with the very idea of treating Bitcoin as an ordinary currency. In fact, as revealed in a report by CNBC, Bitcoin has officially been classified as a commodity in the U.S. by the Commodity Futures Trading Commission. That doesn’t mean that it can’t be used as regular currency, of course, but it says a lot about how some experts view Bitcoin—as a resource that will be bought, stored and traded more than actually used for everyday transactions.
But just because it’s classified essentially as an investable resource, does Bitcoin deserve your attention? Ironically, that actually has a lot to do with how many people continue to see value in it as a day-to-day utility, not just on the consumer side but on the merchant side as well. According to FXCM’s look into Bitcoin’s structure and function, the currency is already accepted by a wide array of online businesses, and more and more major companies seem to be jumping on board. Brands like Overstock and PayPal have previously made headlines for adapting to accept Bitcoin, and there are also more in-person businesses that are enabling electronic digital currency payments. Keeping a close eye on this aspect of Bitcoin’s growth figures to be one of the better ways to judge its future value in the years to come. The more mainstream stores that accept it, the more consumers will feel that it’s useful enough to buy and trade.
If you’re going to approach Bitcoin as a potential investment, however, much more thorough analysis is required. In short, you need to treat it the same way you might treat any other commodity or stock you’re considering. Toward the end of last year, this Forbes piece in favor of Bitcoin investment pointed to a number of different factors you may want to keep an eye on: not only the shifts in utility and acceptance, but also comparisons to other commodities (like gold), basic trading metrics, government attitudes toward cryptocurrency, and even the fairly unique fact that Bitcoin has fixed growth potential over time. Anyone considering an investment needs to devote careful attention to each of these indicators.
The truth is that the total outlook on Bitcoin heading into 2016 is arguably as positive as it’s ever been. The digital currency has steadily gained more influence in the past two years, and it appears poised to continue doing so. That’s not to say you should necessarily go out and invest, because even though it’s looking more stable there are still a lot of unknowns with the growth of digital currency. In a sense, this whole concept is uncharted territory, and there are certain to be some unpredictable developments along the way. But as for the core question of whether or not Bitcoin deserves your energy and attention, it should at least be considered as a viable option rather than an insignificant gimmick.