Bitcoin: Brutal price swings, total loss risk – Why you should keep your hands off

Bitcoin is experiencing wild volatility and dramatic downturns – is this still an investment or just gambling? Extreme losses threaten, regulators warn, and security gaps increase the danger.

Anyone who has glanced at Bitcoin's price chart over the past three months knows: this is a rollercoaster ride for the brave or the reckless. At the start of March, Bitcoin traded near 62,000 euros, before a euphoric surge catapulted prices up to almost 70,000 euros in early April. What followed was a brutal setback: A sudden double-digit crash within days, with losses of over 15 percent from peak to trough, shook even seasoned crypto speculators. No classic stock or gold investment would expose you to such violent swings in such a short time. This is the pure essence of volatility – and it makes Bitcoin a vehicle for sheer speculation rather than smart long-term investment. Is this still investing or has it already become outright gambling?

The news landscape of recent weeks paints a bleak picture for all those hoping for stability or safety in Bitcoin. Just in the past two weeks, the U.S. Securities and Exchange Commission (SEC) has published new warnings about the lack of regulatory protection for cryptocurrencies. At the same time, reports of renewed hacking attacks on major exchanges have unsettled the market – investor funds worth hundreds of millions were affected. Meanwhile, respected analysts – as reported by CNBC and CoinDesk – are increasingly warning of a speculative bubble, especially as the U.S. Federal Reserve sticks to its hawkish stance: Rising interest rates and a strong dollar make speculative assets like Bitcoin even more vulnerable to abrupt crashes. On top of that, some governments – as seen recently in India and Turkey – are tightening the reins on crypto trading or even considering outright bans. All of this can provoke panic selling at any time.

So what exactly is Bitcoin, and why is the danger so acute? Technically, Bitcoin is an open-source peer-to-peer payment network without a central authority, celebrated for innovation and global transferability. But caution: Unlike stocks, bonds, or precious metals, Bitcoin has no intrinsic value backing it – there are no earnings, no dividends, no physical commodity. Every euro you put in is at the mercy of pure speculation and collective FOMO. The price is driven by hype, herd mentality, and blind faith that someone will pay more in the future. If confidence collapses, the result is a plunge of breathtaking speed – and recovery is never guaranteed.

Security risks are also enormous. If you lose your private key – the only access to your digital wallet – your coins are irretrievably lost. Hackers regularly exploit vulnerabilities at major crypto exchanges, sometimes appropriating millions. There is no state deposit guarantee, no central bank backup. If a provider goes bankrupt, your assets could vanish overnight. This is the harsh reality of high-risk investment in the year 2024.

The psychology surrounding Bitcoin further amplifies the risk: When prices rise steeply, even clever people jump on the FOMO bandwagon – the fear of missing out. But as soon as the mood turns, panic sets in, and panic selling begins. Timing the market is practically impossible; even the pros are often wrong. What remains is a nerve-wracking game in which normal savers almost always draw the short straw.

In summary: Bitcoin and comparable crypto assets like it are anything but a safe haven or sensible long-term savings vehicle. In the last three months alone, fortunes have been made and lost within days – frequently due to completely irrational price movements and unexpected external shocks. These are the unmistakable symptoms of a high-risk speculation playground, not a serious investment class.

If you want to preserve your capital and sleep soundly, you should keep your hands off Bitcoin. The risks of price collapses, hacks, and regulatory changes are simply too great. Only those who can really afford to lose their entire stake – and are looking for pure adrenaline – should consider such a bet.