Should you invest in Bitcoin?? Over the years, we've seen madness happen for Bitcoin as it broke record prices on major cryptocurrency exchanges in 2017, more than doubling from that year's record price. It is difficult to predict whether this cryptocurrency will end up being a major investment or just a passing storm. The excitement of riches or the volatile nature of risk will make some investors wary, but others want to seize the opportunity to profit from an investment in Bitcoin.
Advantages of investing in Bitcoin
Bitcoin's excellent performance as a currency and investment has attracted both traditional and institutional investors. Bitcoin as an investment tool offers the following advantages over traditional investments.
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Bitcoin is arguably one of the most liquid investment assets due to the advent of Bitcoin exchanges and online exchanges across the world. You can easily exchange Bitcoin for cash or assets like gold instantly with extremely low fees. The high liquidity associated with Bitcoin makes it a great investment vehicle if you are looking for short-term profits. Digital currency can also be a long-term investment due to high market demand.
Reduce the risk of inflation
Unlike world currencies that are regulated by their governments, Bitcoin is immune to inflation. The blockchain system is unlimited and you don't have to worry about your cryptocurrency losing value.
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New chance
Bitcoin and cryptocurrency trading is relatively fledgling, but new coins are becoming popular daily. This novelty brings unpredictable price swings and volatility, which can create opportunities for a lot of profit.
minimalist transaction
Stock trading requires you to have a certificate or license. You also need to go through a broker to trade the company's stock. But Bitcoin trading is very simple, just buy or sell Bitcoins from exchanges and put them in your wallet. Bitcoin transactions are also instantaneous, unlike the settlement of stock trading orders, which can take days or weeks.
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Disadvantages of investing in Bitcoin
Bitcoin may be the future of the Exchange, but it is equally important to be aware of the concerns around investing in Bitcoin. Here are some of the serious risks involved in investing in Bitcoin.
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Movement
Bitcoin price is always fluctuating back and forth. If you buy Bitcoin on December 17, 2017, the price will be US$ 20,000. Weeks later, you cannot sell your investment for more than $ 7,051. The Bitcoin market is constantly changing. With such an unpredictable market, you are unlikely to get a good return on your investment. To avoid big losses, keep an eye on the market.
The threat of online hackers
Hacking is a major threat faced by a Bitcoin investor. Bitcoin exchanges allow you to buy and sell your cryptocurrency using a website or mobile app. This makes them vulnerable to hacking and stealing all your investments as Bitcoins are held on exchanges that are not insured by the FDIC.
Little or no regulation
The Bitcoin market currently operates without major regulations. It is not taxed and governments do not have a clear policy on this. As a result, you may face fraud and malpractice.
limited use
Currently, Bitcoin is only accepted by a few online sites. Many companies also do not recognize Bitcoin as a legitimate transaction method, making it a difficult investment vehicle. Furthermore, there is only a fixed supply of Bitcoin of 21 million BTC.
Wallet can be lost
If your hard drive fails or a virus corrupts your wallet files, you will lose your Bitcoins. You can go from a wealthy investor to a bankrupt investor in seconds with no way to recover.
Should you invest in Bitcoin?
It seems silly to some that one Bitcoin can be worth thousands of US dollars. soWhat makes Bitcoin so valuable? What is the reason? Should you invest in Bitcoin?
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Bitcoin is scarce
Consider gold as a model currency. There is a limited amount of gold on earth. As new gold is mined, less and less gold remains and it becomes more and more expensive to mine. For this reason, along with the millennial history of gold as a medium of exchange, it has long been considered a hedge against monetary inflation. Gold is an asset that is rarely owned, although gold has become much more popular. If you ask any central bank, any sovereign wealth fund, any individual what percentage of their investment portfolio is gold, you will find that it is a very small number, even a very small number, especially at a time when we are losing the monetary regime. .
The same goes for Bitcoin. There will only be 21 million Bitcoins and over time they will become increasingly difficult to mine. Take a look at Bitcoin’s inflation rate and supply rate:
Useful Bitcoins
In addition to being scarce, Bitcoin is also a useful digital asset. Bitcoin provides solid and predictable monetary policy that can be verified by anyone. Bitcoin's monetary policy is one of its most important features. It is possible to know when a new Bitcoin was created, when a Bitcoin transaction was created or how many Bitcoins are in circulation. Bitcoins can be sent from anywhere in the world to anywhere else in the world. No bank can block your payment or close your account. Bitcoin is censorship-resistant money.
Bitcoin’s blockchain technology and public ledger make cross-border payments possible while providing an easy way for people to escape the government’s failed monetary policy. The Internet makes information global and easily accessible. A good global currency like Bitcoin would have a similar impact on finance and the global economy. If you understand the potential impact of Bitcoin, it's not hard to see why investing in Bitcoin might be a good idea.
Bitcoin has a desirable correlation with the market
Bitcoin is considered an unrelated asset, meaning that there appears to be no link between the performance of traditional stock and bond markets and that of Bitcoin. This is desirable for traders looking to diversify their portfolio risk. By adding Bitcoin to their portfolio, they are able to reduce the likelihood that a severe drop in stocks will negatively affect their net worth.
Bitcoin price
There is no official Bitcoin price. Bitcoin virtual currency rate is set by the price people are willing to pay. Buying Bitcoins around the world is a good source of current and historical prices. Bitcoin price is usually displayed as the price of one Bitcoin. However, Bitcoin exchanges allow you to buy any amount and you can buy less than one Bitcoin. Here is a chart that shows the entire price history of Bitcoin:
Conclusion
Bitcoin investments are not like regular investment portfolios because of their distinctive properties. We hope that with the information shared above, investors will have their own judgments to be able to answer the question of investing in Bitcoin? And if you are excited about Bitcoin now and can accept the risk of losing some space, this could also be an exchange investment opportunity. However, we always advise investors that security is an important factor when deciding to invest in Bitcoin.
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