Have you seen the Bitcoin price??
That was the frantic call I got from a friend last week.
One Bitcoin is now valued at over 1,00,000 US dollars! Converting this to Indian rupees, that’s approximately Rs. 85 lakhs.
Like my friend, many are wondering if they’ve missed a golden opportunity. Others are thinking about whether it’s wise to invest at such high levels.
When someone as powerful as Donald Trump appears to back cryptocurrencies, the hype feels real.
This post is part one of my take on Bitcoin.
*My Disclaimer:*
I have not invested a single rupee in Bitcoin—and I won’t in the future, no matter how high its price rises.
Here’s why:
What is Behind an Asset’s Price?
Take a single share of Reliance, for example. If its price is Rs. 1,000, that valuation is supported by the company’s vast assets, an impressive track record, and the hard work of thousands of employees.
Now consider Bitcoin. What supports its value? The answer: nothing. Its price is driven solely by the belief of millions hoping to make quick money.
This speculative nature makes Bitcoin extraordinarily unstable. A single tweet from someone like Elon Musk can cause its value to go up or down by 20% or more.
Would you invest your hard-earned money in something so fundamentally flawed? I wouldn’t.
Dispute resolution:
In the financial world, disputes happen. If you face an issue with a mutual fund, India’s regulator SEBI ensures strong investor protection. While investors might lose money due to market risks, a mutual fund company cannot cheat you without consequences.
Now, compare this to Bitcoin. What happens if there’s a dispute? There’s no regulator—no RBI, no SEBI, not even anyone from foreign governments. If you face a problem, you’re on your own.
Recent hacking case:
Take the example of WazirX, one of India’s most popular Bitcoin exchanges. A recent hacking incident resulted in significant losses for lakhs of Indian investors. Unfortunately, they’ll receive no legal help from the Court or Police, as cryptocurrencies operate outside formal regulations.
Fraud and hacking are rampant in the crypto world. Consider Sam Bankman-Fried and Changpeng Zhao, the owners of the world’s two largest crypto exchanges. Both were recently jailed by U.S. authorities for fraud and cheating investors.
Even celebrities in the U.S. have faced hefty fines for promoting cryptocurrencies without explaining the risks.
However, even after such red flags, it is not easy to ignore the attraction to Bitcoins by the FOMO-driven crowd
