Should you invest in Bitcoin?

Should you invest in Bitcoin?

Backgrounder Bitcoin is a new kind of global payment network that many consider to be a currency as valid as a dollars, euros, and yen. Bitcoin is meant to be a quicker, cheaper, and more reliable form of payment than money that’s tied to individual countries. In addition, it’s the only form of money users can theoretically “mine” themselves, if they have the right computing power. And anyone can buy and sell bitcoins through exchanges. One big difference is that Bitcoin is entirely digital; no one is carrying around actual bitcoins in their pocket. Bitcoin has become increasingly accepted as a currency on par with other currencies, to the point that it has become exchangeable with the dollar and the euro at prices accepted by the global financial community. It is now recognized in many countries, including the United States, at a means of commercial exchange, or a stored value of wealth, giving it the appearance of a bona fide currency. Can Muslims use Bitcoin? And what should investors be aware of if they want to invest in it? The Islamic perspective on Bitcoin According to Azzad Asset Management Shariah Advisory Board Member Emeritus Dr. Abdulbari Mashal, Bitcoin exhibits a

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The Bitcoin bust of 2018

If you thought investing in stocks was bad in 2018, be glad you stayed away from Bitcoin. While stock market investors are still nursing their wounds from a down year in 2018, Bitcoin investors were devastated. The cryptocurrency has fallen considerably from the dizzying heights it reached in December 2017. As of this writing, Bitcoin has lost 80% of its value since the beginning of 2018, while the total market value of all cryptocurrency had fallen about 87%. Part of the problem is that Bitcoin is hard to value, and its value fluctuates wildly–even worse than stocks did in December. A typical asset has a set of cash flows, and its value is driven by investors’ expectations of those cash flows. Cryptocurrencies have no cash flows. Because of this, they’re more like gold; their value is driven to some extent by their desirability and potential uses, but mostly by the cost of mining. While there are many estimates of the cost of mining Bitcoin, most suggest that it’s close to $5,000 per coin. As of this writing, Bitcoin is valued at around $3,600 per coin. Now that it is valued below its cost of mining, there is little incentive to mine

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