Bitcoin Investment - High-Risk, High-Reward?
Between Jan. 2011 and Dec. 2013 the cost to purchase a single bitcoin went from $0.30 to $1,147.25*.
While bitcoin was not able to sustain such a high price, its price has dropped to $455 per bitcoin, some still see the virtual currency as a good investment.
BitPay, a Bitcoin processor, has received $30 million in funding from an investor group which includes Virgin Group Chairman Richard Branson and Yahoo Co-Founder Jerry Yang. The new investment brings BitPay’s overall value to around $160 million.
The funding comes after a rough winter for the digital currency. Not only did Mt. Gox, a bitcoin exchange service, file for bankruptcy in February but Flexcoin, a Canadian bitcoin bank, was forced to shut down after its website was attacked by a hacker who stole more than $580,000 worth of bitcoins.
If the fall of those two businesses wasn’t bad enough for bitcoin, the US Securities and Exchange Commission has issued an advisory warning investors of potential problems with virtual currency. The warning states that investors should be wary of fraud and Ponzi scheme’s involving virtual currency.
"A new product, technology, or innovation -- such as Bitcoin -- has the potential to give rise to both frauds and high-risk investment opportunities. Potential investors can be easily enticed with the promise of high returns in a new investment space and also may be less skeptical when assessing something novel, new and cutting-edge," expressed the SEC.
*Source - coindesk.com