The Pros and Cons of Bitcoin Investing!

Investing in cryptocurrencies comes with risks, but sometimes there are benefits for investors. The bitcoin market is highly volatile and every investor needs to have extensive knowledge and understanding of their bitcoin investments.

It is a growing cryptocurrency making its way into the mainstream and is also believed to be the future of money. It is possible for you to become a Crypto Nation Pro login and invest in it.

So let’s understand the pros and cons of investing in Bitcoin.

Benefits of Bitcoin Investing

More possibilities

The cryptocurrencies that exist today are young, and these new cryptocurrencies are making their way into the mainstream. The unique properties and unpredictable rise and fall in the price of cryptocurrencies like bitcoin create more and more opportunities for businesses to generate profits.

Businesses and corporations can expand their business and trade internationally using Bitcoin and other cryptocurrencies.

liquidity

Bitcoin’s rising popularity has given rise to crypto exchanges, thousands of online brokers and trading platforms, making Bitcoin the most liquid asset. Individuals can trade bitcoin like gold or cash, and best of all, there are no high transaction fees.

Being highly liquid, it is a significant investment like gold. Due to the high demand in the market, both short-term and long-term investments are made in Bitcoin.

Minimalist trading

To trade stocks, the traders must have either a license or a certificate and it is mainly a broker who trades the stocks of a specific company. This is not the case with Bitcoin as it is a minimalist trade.

Traders or investors can easily buy or sell bitcoins and other cryptocurrencies from crypto exchanges and store bitcoins in bitcoin wallets. Bitcoin wallets allow instant transactions to be made anywhere, anytime.

Low risk of inflation

Because fiat currencies are government-related and regulated and controlled by governments, Bitcoin is inherently decentralized. Bitcoin is not vulnerable but resistant to inflation. The supply of bitcoin is finite and these are not printed but mined through the mining process.

Blockchain is the technology that the entire Bitcoin network relies on. No government or financial institutions can affect the price of bitcoin, but other factors affect the value of bitcoin. However, compared to fiat currencies, there is less risk of inflation.

Disadvantages of Bitcoin investments

online hacking

E-commerce has led to online hacking and has become a significant threat to cryptocurrency investors. Bitcoin exchanges and trading platforms allow users to quickly buy and sell cryptocurrencies through websites or mobile wallets.

Storing and transferring bitcoins through wallets makes your crypto tokens vulnerable to theft and hacking. The main concern is that bitcoins stored on exchanges aren’t even insured by the FDIC, making them riskier investments.

No government regulations

Satoshi Nakamoto, creator of Bitcoin, designed Bitcoin as a decentralized currency, meaning that no governments or other central authorities are involved. No government means no regulation in the bitcoin market.

Currently, Bitcoin investments are not taxed, no government exploits them for illegal trading, and they are subject to abuse by hackers and scammers.

price volatility

The Bitcoin market is very volatile and hence its price is constantly changing drastically. For example, if you had invested in bitcoin before 2017 and wanted to sell in 2017, you can make massive profits since 2017 was the year that the price of bitcoin peaked.

If you invested in Bitcoin in 2017 and wanted to sell your investments in 2019, you could have lost half of your money because the market was down in 2019. Because of this, investors consider Bitcoin a risky investment and are reluctant to invest in it. Even if you want to invest in Bitcoin or other cryptocurrencies, you need to do technical analysis to learn more about the Bitcoin market.

Limited supply and limited use

Bitcoin has a finite supply, and there are only 21 million bitcoins, making it a valuable asset. But until now not all people worldwide know about bitcoin and only limited online merchants have started to accept it. Not all companies and governments consider Bitcoin a legal exchange, making it a risky investment.

Article on bitcoin investing and permission to publish here provided by Jean Nichols. Originally written for Supply Chain Game Changer and published on March 10th, 2021.

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