The Dangers of Investing in Bitcoin

What are the Dangers of Investing in Bitcoin?

Bitcoin is becoming more and more popular, but is still not widely held. With one study suggesting there are around 25 million cryptocurrency traders outside the USA & Europe, it seems quite likely there are over 100 million owners of bitcoins. If true, it means only about 1.3% of the world’s population owns bitcoin (BTC).

One of the main reasons is the risk and danger of holding a cryptocurrency. Here are the main reasons people are wary to hold Bitcoin:

• loss of keys
• loss of password
• water damage
• fire damage
• kidnapping
• forcible entry
• co-erced persuasion

If you hold Bitcoin, you will have a set of keys. A public key (the wallet address) and a private key, which you need to keep secret from everyone. This may cause issues as outlined above.

To increase security, people buy extra security, such as a Ledger Nano or a Ubikey to increase security.

On top of this, people buy fireproof, water resistant metal plates to try to increase security.

But, none of these security measure help with kidnapped or forced coersion.

Coercive persuasion refers to social influences capable of producing substantial behavior and attitude change through the use of coercive tactics and persuasion, via interpersonal and group-based influences.

In other words, other people can force you to give up your passwords & keys from right inside your own home, usually either through drug usage or through force by firearms.

However, there is another solution to increase security and protection through third parties.

Investing in Bitcoin through an Insurance Bond

Investing in a Bitcoin trust through an insurance bond provides more layers of protection and a deeper security protocol. These Bitcoin trusts may be located in underground bunkers in Switzerland and require multiple party sign off to send & receive Bitcoin.

On top of this, in order to purchase an insurance bond, a financial adviser must be attached. You cannot set up an insurance bond yourself and any trades require both you, your financial adviser and the insurance company to sign off on the trade. Then, the Bitcoin trust needs multiple ring signature sign offs as well.

This provides a thick layer of protection for individuals who want to invest in Bitcoin.

Furthermore, investment bonds are set up over a 10 year period, which means you avoid any temptation to cash in your Bitcoin early.

An investment in Bitcoin is a long term investment. Bitcoin can now be held in retirement accounts in the USA via Bitcoin IRAs and other expats can hold Bitcoin in retirement accounts via insurance bonds which allow cryptocurrency investments.

Bitcoin as Asset Diversfication

Financial advisers can set up insurance bonds, which act as an insurance “wrapper” which can hold a wide array of investments.

You can use smart planning to set up a retirement fund or an education fund for your children or grandchildren by contacting a financial adviser.

Investing in Bitcoin in a Diversified Portfolio

Here is an example of an investment in Bitcoin as part of a diversified balanced portfolio set up by a qualified financial adviser.