Take heed to avoid a repeat of MMM episode in the country.
To many enthusiasts of Bitcoin and cryptocurrencies, not investing in it is a bad decision. As good as this sounds, it is rather not backed up by an investment or economic principles and model. All is based on the impulse and widespread information that it is a potent investment that offers high returns within a short period of time.
Something like Ponzi Scheme and all network-based businesses like GLND, Helping hands international and others in that category. Avoiding a repeat of MMM episode in Nigeria is necessary.
Looking at the situation, here are 5 reasons you should not consider investing your money in Bitcoin.
The first big issue about the Bitcoin is the lack of clarity about its origin. Its proponents claimed Bitcoin mined through the use of complex mathematical formulae, but they are yet to categorise it as either a currency or a commodity. Thus, putting your money it means you are investing in something not existing (not a currency, commodity or financial asset).
Bitcoin or other cryptocurrencies are neither precious metal not fiat money. To businesses and people, Bitcoins are just formula, not a tangible asset.
Bitcoin and other cryptocurrencies are highly unstable, and very risky. Hence the reason for its extreme volatile price.
Most importantly, there is nothing primary reason to account for its price increase except a rise in demand. Thus, turning into a bubble that will eventually burst and cause many financial losses like MMM and other Ponzi schemes.
Bitcoin is unlike other investment or financial assets, it is unregulated by the government, investment agency or banks. In case of market collapse, there is no agency that can be contacted to get a refund or compensation.
The whole transaction system is based on “get as much as possible if you are lucky, but when the system gets ripped off it is impossible to get the money back."
Trading in cryptocurrencies comes along with a high propensity of a risk of fraud. Aside from the misinformation on the whole process, the system is based on pyramid system. The early you get in, the better financially and risk wise.
More so, the campaign of Bitcoin and cryptocurrencies in Africa is being sponsored by Ponzi scheme operators.
Legality of use of digital currencies to trade is one thing that cannot be defended in court. Thus, any litigation from transaction premised on it is a null and void.
The Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Corporation (NDIC) have issued many public releases to this effect.