ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

3 Things You Should Consider Before Investing in Bitcoin

Updated on April 7, 2017

With the price of Bitcoin recently surpassing that of gold, more and more investors are becoming interested in getting some of their own digital cryptocurrency. However, the same question that Bitcoin enthusiasts have asked since Bitcoin’s inception is still relevant. Is Bitcoin a good investment? Here are 3 things you should consider before investing in Bitcoin.

1. The Price of Bitcoin Is Extremely Volatile

Although we have seen the price of Bitcoin rise past the current price of gold, we have also seen the price spike at $1,000 in the past and then drop down to $200 and remain there. The problem with Bitcoin is that you never know how the prices will work. Bitcoin is a relatively new currency and the honest truth is that the currency’s market could crash at any moment and your investments could go down with it. If you decide to invest in Bitcoin, remember to buy low and sell high and keep in mind that there is always the possibility that the low may not ever get higher.

2. You Will Have to Pay Taxes on Bitcoin

Bitcoin is not exempt to taxation and the type of taxes that you will have to pay are extremely complicated. If you are solely an investor, paying taxes will be relatively easy because you will only have to pay the capital gains and losses of all the Bitcoin that you have bought and sold. If you are a miner or you earn Bitcoin through games and other means, the taxes become much more difficult. Not only will you have to pay taxes on capital gains, but you will also have to pay taxes on Bitcoin as if they were a paper currency and you might possibly have to pay self-employment taxes on that earned Bitcoin as well.

3. There Is Always the Risk of Your Bitcoin Being Stolen

Security comes at a price, and that is especially true when it comes to securing your Bitcoin. Online wallets and free digital desktop wallets are always at risk of being hacked. Even high-end wallets that are expensive aren’t completely secure. Not only that but if you lose the security keywords that are given to you when you first create your wallet, your Bitcoin is gone forever. If you want to prevent these things from happening, make sure that you purchase a secure wallet and store your security words in a place that will keep them from harm. Also, store your Bitcoins in several wallets. If something should happen to one wallet, whether it be hacking or loss of your security words, you will not have lost all the Bitcoin that you own.

So, is Bitcoin a good investment? It all depends on those who are investing in the digital cryptocurrency. If you are interested in cryptography and you believe in what Bitcoin is and what it is trying to achieve, then you should probably invest in it. If you are an investor who doesn’t understand the mechanics behind Bitcoin and is looking for a way to make money, this probably won’t be a good investment for you. For everyone who intends to invest in Bitcoin, remember the 3 things that have been listed in this article before investing any money into Bitcoin.

Is Bitcoin a Good Investment

Is Bitcoin a Good Investment?


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)