One article to understand: Is Bitcoin an investment or a speculation?

php editor Youzi will analyze for you whether Bitcoin is an investment behavior or a speculative behavior. Bitcoin, as an encrypted digital currency, has attracted much attention in recent years. It is controversial among investors, with some seeing it as an investment tool and others seeing it as more of a speculative practice. Is Bitcoin an investment or a speculation? Let’s explore it together.

Is Bitcoin an investment or a speculation?

Bitcoin can be considered an asset with both investment and speculative components, depending on the motivations and strategies of the individual investor.

Investors typically hold assets in anticipation of future returns. As for Bitcoin, some investors are optimistic about its potential in the long term and believe it may become a valuable digital asset. This type of investor performs fundamental analysis, studying Bitcoin’s potential uses, adoption rates, technology and market fundamentals and incorporating it into their long-term investment portfolio.

Speculation involves short-term trading and market fluctuations, and speculators usually try to make profits through short-term price fluctuations. They may use technical analysis to find short-term trading opportunities and may be less interested in Bitcoin's long-term prospects. Speculators may buy and sell Bitcoin frequently in the hope of making quick profits in a short period of time.

The line between investment and speculation is relative rather than absolute. The same investor may adopt different strategies at different times and situations, including long-term investment and short-term trading. Additionally, there are a variety of investors in the market, with some choosing to hold Bitcoin for the long term, while others engage in daily trading.

Bitcoin is the first true currency.

What is currency? It is both a medium of transaction and a carrier of wealth. Before Bitcoin, most people did not fully agree with the concept of wealth carrier. Some people believe that gold, stocks, and bonds are also carriers of wealth, while others believe that real estate, calligraphy and painting are the real carriers of wealth.

Some people believe that the emergence of encrypted digital currency can ensure the absolute fairness of currency, thus avoiding the problems of inflation and devaluation.

So with Bitcoin, currency is no longer just a medium of transaction, but has further evolved into the lowest and most secure carrier of wealth. All the movable real estate we are familiar with at this stage, whether it is futures, stocks, bonds, precious metals, or real estate, are nothing more than superstructures that introduce additional risks.

To reiterate, we did not have the concept of currency = carrier of wealth before, just because we did not have real currency. Once it exists, money is by definition the only carrier of wealth. Every penny we work hard to earn will, for this reason, narrow the gap between us and the rich to a much greater extent than it is now.

This is why you should invest in Bitcoin. Every cent of your fiat salary that you convert into Bitcoin is helping you accumulate real wealth.

After the advent of Bitcoin, labor is no longer a humble effort to beat CPI in the past, but the only way to share the world's wealth and change class.

We are fortunate enough to be at the beginning stage of this social change that is so basic that it cannot be more basic. Each of us should be extremely grateful. Bitcoin itself can already change everything, and the early effects will amplify our gains exponentially.

After understanding this, you will know the answer to this issue. Bitcoin has transcended the meaning of investment. For society, it is an inevitable revolution; for individuals, it is a lucky gift from God to every ordinary person in this era.

What is the difference between investment and speculation?

There is often a clear difference between the starting points of investment and speculation. The starting point of speculation must be the "expectation" that prices will rise or fall, while the starting point of investment is more to create an increase in wealth.

From a motivation point of view, investment and speculation have the same purpose, which is to make a profit. But investment can be given more purposes, such as building roads to help citizens travel, increasing GDP, investing in learning for the rise of China, and so on. The motivation for speculation is relatively simple, which is to make a profit.

From a method point of view, in order to achieve the purpose of acquisition, speculation must transfer the ownership of the speculative product. For example, if you buy Bitcoin as a speculative product, you must sell it at a higher price in order to make a profit. There are many ways to make profits from investment. For example, if you invest in buying a house, you can rent it out and collect rent without transferring ownership. And by investing in learning, you can sell the skills that come with it to make a profit.

From the effect point of view, the increase in the total wealth generated by investment in society is obvious. Speculation is considered by most people to be a zero-sum game that does not produce wealth appreciation.

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