4 Facts About Cryptocurrencies: Should You Invest?

Introduction

Cryptocurrencies like Bitcoin have taken the financial world by storm. Chances are, you’ve heard the buzz—stories of people making or losing fortunes overnight. Maybe you’ve even thought about giving it a shot. But can cryptocurrencies really be considered a safe and reliable investment?

Let’s break this down into four simple facts to help you decide. By the end, you’ll see why I believe cryptocurrencies might not be as promising as they seem.

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Fact 1: Cryptocurrencies Are Not True Investments

At their core, cryptocurrencies are just lines of software code stored on a blockchain. They don’t have any physical assets or underlying value to back them up.

Here’s the thing:

• When you buy shares, you’re investing in a company that creates goods or services. These companies provide real value to society—whether by solving problems, creating jobs, or offering products people need. That’s why their stocks have worth.

• When you invest in gold, it’s not just about the price tag. Gold is used in jewelry, industrial applications, and even holds cultural significance.

Now let’s look at cryptocurrencies. Their value is 100% speculative—it’s simply based on what someone else is willing to pay for them. There’s no company behind it, no product being made, and no real-world utility driving its price.

Even after years of growth, cryptocurrencies still lack widespread, meaningful uses. Can you use Bitcoin to buy a cup of tea at your local café? In most places, no. What about purchasing a car or property? Still very rare.

The reality is that when an asset exists purely for speculation, it has limits. Sooner or later, people might stop paying inflated prices for what is essentially just software code. When that day comes, the market could collapse like a house of cards.

Fact 2: Cryptocurrencies Are Unsafe and Unregulated

Now let’s talk about safety. If you put your money into cryptocurrencies, how secure is it? Sadly, the answer is “not very.”

Unlike traditional investments like stocks, bonds, or mutual funds, cryptocurrencies operate in a largely unregulated environment. For example, in India:

• The Reserve Bank of India (RBI) doesn’t oversee cryptocurrencies.

• The Securities and Exchange Board of India (SEBI) doesn’t protect crypto investors.

This means if you lose your money, there’s no authority to file a complaint with. You’re on your own.

Here are two real-life examples of what can go wrong:

1. Crypto BNS Case:

This Indian crypto exchange froze customer accounts, citing legal troubles and police investigations. Many investors trying to withdraw ₹1 lakh or more have been waiting for over six months with no resolution.

2. WazirX Case:

Another major exchange, WazirX, faced allegations of hacking and fraud. Some suspect the “hack” may have been an excuse to withhold customer funds.

When you invest in cryptocurrencies, you’re not just risking market volatility—you’re also gambling on whether the platform itself is trustworthy. With no regulation, there’s no way to recover your money if things go wrong.

Fact 3: Legal Issues and Negative Uses

One of the biggest challenges with cryptocurrencies is their shady legal status. Many authorities associate crypto with illegal activities.

Here’s what cryptocurrencies are often used for:

• Hiring people for illegal activities.

• Buying drugs or other illicit items on the dark web.

• Laundering money or illegally transferring funds abroad (hawala).

Two real-life examples highlight the risks:

1. Case 1: Arrested for Selling Crypto

An investor sold ₹10 lakh worth of Bitcoin to a buyer who offered a good price. What he didn’t know was that the buyer was a scammer involved in illegal activities. The seller was arrested, and his family had to fight a lengthy legal battle just to get him out on bail. Even two years later, they’re still dealing with legal fees and uncertainty.

2. Case 2: Financial Ruin During Lockdown

A successful transporter with a fleet of 8–10 trucks decided to invest heavily in Bitcoin just before the COVID-19 lockdown. When the market crashed, he lost over ₹2 crore. To make up for his losses, he sold his trucks and ended up in financial ruin.

These stories highlight the dangers of crypto’s unregulated and anonymous nature. Even well-meaning investors can find themselves in legal or financial trouble.

Fact 4: The Market Is Easily Manipulated

The cryptocurrency market is a playground for manipulation. Without proper oversight, scams like “pump and dump” schemes are common.

Here’s how it works:

1. A small group of investors inflates the price of a cryptocurrency by buying and selling it among themselves.

2. Once the price peaks, they sell off their holdings, causing the market to crash.

Most cryptocurrencies are controlled by their creators or a handful of large holders. This makes it incredibly easy to manipulate prices.

Consider Bitcoin. At one point, it traded at over $100,000, only to drop to $95,000 shortly after. These wild price swings can wipe out unsuspecting investors in no time.

Even worse, if a crypto exchange claims it was hacked, there’s no way to verify whether it’s true or if the company simply took the money. Investors are left with no options.

Conclusion

Let’s be honest—cryptocurrencies are not a safe or reliable investment.

They’re speculative, lack intrinsic value, and are prone to manipulation. On top of that, they’re unregulated and often associated with illegal activities.

Even if Bitcoin’s price soars to ₹2 lakh, I wouldn’t touch it. Why? Because it’s not a real investment—it’s a gamble.

The financial world is full of opportunities, but that doesn’t mean you have to fall for the hype. Protect your hard-earned money. Don’t let influencers or commission-driven agents pressure you into risky decisions.