The cryptocurrency wave has been, and still sweeping across the world. These tokens have become a global phenomenon. There is always a new entrant on the come up trying to rival the big dogs of cryptocurrency like bitcoin. The recent surge in the valuation of these tokens, bitcoin in this case, has attracted so many people to get on board and invest their hard earned cash so as to make an “easy” profit.
Bank of Uganda warned the public not to venture in cryptocurrencies but Katherine Atuhairi, most known as the Ugandan Bitcoin Queen, thinks this will market the currencies even further since humans are naturally tempted to do what they are forbidden to do.
Investors haven’t seen such high returns from other investments within such a short span of time. So many of them are tempted to try it out, hoping to make quick investment returns. The hype surrounding these cryptocurrencies is so wide spread. The returns look so ripe. It’s now tempting even those that have the least information about the cryptocurrency world to surrender the Shilling for these tokens.
But, are such almost unrealistic titanic returns a strong enough reason for you to set eyes on cryptocurrencies as an investment? Here are 5 reasons why should stay away from cryptocurrencies.
1. They are not legal in Uganda.
They haven’t been declared illegal either by Bank of Uganda. But BOU made it clear it doesn’t recognize cryptocurrencies as a “currency” and advised people not to use them because of potential financial, operation and security risks that may come bundled with them.
2. Their use is limited.
There are no known traders that accept cryptocurrency as settlement for the transactions you make with them. By investing your money into cryptocurrencies, you are sacrificing your liquid currency (Shilling) for a token that is not even considered a currency in the country.
3. A fall in their valuation and your money is gone too.
The exchange value of these tokens changes abruptly. It may rise and attract investors who buy it at already high prices hoping to sell the tokens when the value increases further. But once demand falls and the value nose dives, you are departed from your money with huge loses.
4. These tokens are unregulated.
There are no watchdogs for cryptocurrencies. The Bank of Uganda regulates the shillings and may follow up transactions in case you are ripped off. But in the cryptocurrency realm, once your ripped off, that’s it. Not even the government in all it’s glory can get your money back.
5. Security is still an issue.
If you’ve only been reading articles that feed you with luring information about the high prices and the bitcoin millionaires that made it from a small investment, then u might consider reading some about the people that have lost it all to fraudulent activities. These tokens are not regulated by any body. In an instance when you lose your tokens, it’s almost impossible to get them back since no given body in Uganda follows up such transactions. Even with the strength of the mighty block-chain technology, it’s still prone to hacks.
Final Thoughts.
Before you make an investment, ask yourself these questions. Is my capital and returns safe? Will I make any money? Can I liquidate my holdings during a crisis? And chances are, you will only invest if the answer to all these questions is ‘yes’.
If jumping on bandwagons is part of your to-do list. Or maybe you have totally failed to resist the hype and temptation, then I encourage you to buy responsibly. Only put in as much money as you can afford to lose. Bitcoin is a Gamble, not an investment.
