You may have heard recent stories about the exploding price of Bitcoins, and the fortunes of those who got in when they were worth a tiny fraction of what they are now; you may have thought that this recent hike in value meant that you had missed your chance to get into Bitcoins. This isn’t the case, as there are still plenty of good reasons to get involved with Bitcoins.
While Bitcoins are becoming more widely used at the moment, they are still of limited use; they can be used for transactions on some sites, such as Reddit, OkCupid and WordPress, but generally, you don’t need bitcoins to buy or sell things online.
Bitcoins could also be used to turn a profit; simply buy low and sell high. However, while the price of Bitcoins is very high at the moment, the currency is still in its infancy, for all intents and purposes; it is very volatile, and while you could turn a handsome profit, Bitcoins could lose 90% of their value in a few days, resulting in investors losing 90% of their investments.
So, for the time being, it is better to get in when the price dips temporarily and then bide your time, perhaps making little transactions and dipping your toes into the Bitcoin pool to get a feel of it.
There are also only a finite number of Bitcoins that will ever exist.
Once 21 million Bitcoins have been mined, there will never be any more created. Once that happens, you can be certain that prices will reach levels that are inconceivable as of now; if you hold onto a few Bitcoins (or steadily build up a wealth of Bitcoins) until the day when they have all been mined, you are guaranteed to turn a healthy profit.
Furthermore, once the technology and the concept of Bitcoins is more widespread and used by more sites, more people and there are less Bitcoins left to be mined, the prices will become far less volatile. This is a double edged sword, because although it means that you run a reduced risk of losing money, you will not turn as big a profit, if you do.
If you’re daring, and want to take a huge gamble on a big payoff, then you should get in on Bitcoins during a dip (like the one in early October this year, where prices dropped to $110), and then ride it until the peak of the next bubble (like the one right now, where prices currently stand at $903).
Bitcoin lead developer Gavin Adresen predicted that Bitcoin would see between one and five bubbles throughout its lifetime. Currently, there have been two Bitcoin bubbles, and there are likely to be a few more. Just because the price has skyrocketed once, does not mean it will not continue to rise in the future.
For all the volatility of Bitcoins, one thing is certain: Bitcoins are a currency on the rise. The time to get into Bitcoins has not passed – it’s right now.