Everyone seems to be talking about cryptocurrencies and in particular Bitcoin. Different reports show that Bitcoin was the top-performing asset in the last decade. If the predictions are anything to go by, it seems that it may be a worthwhile investment. However, since it is hard to predict how the market will perform in the next few years, it is important to weigh all the pros and cons.
There are those who support Bitcoin and claim that is the way to go, while others have jitters and regard it as a passing storm. Investors are always looking for ways to grow their wealth and this is why Bitcoin has caught the interest of many. In this simple guide, we will try and unravel all mysteries surrounding Bitcoin and hopefully help you make an informed decision.
Are There Risks in Bitcoin Investment?
In all honesty, we must start by stating that Bitcoin investment is a speculative form of investment. There are known risks that are associated with this form of trading in that the prices could drop without a warning, data could be wiped and there is also the risk of hacking. Over the past few years, there has been an increase in Bitcoin prices as well as plummets.
Since its introduction, Bitcoin has been growing steadily and most investors have been seeing it as a possible alternative to physical currencies. The decision to invest in cryptocurrency needs to be weighed carefully, understanding the risks involved.
Bitcoin Investment Pros
If you are thinking of investing in Bitcoin here are some advantages that you will enjoy through tools like https://bitcoindigital.io/:
- High Liquidity
One of the key advantages of Bitcoin is the fact that it is a liquid investment. This is made possible by the fact that there are numerous exchanges, brokerages, and trading platforms across the world. This makes it easy to trade your coins and get cash instantly.
- New Investment Opportunities
Bitcoin has opened up a whole new world of cryptocurrency trading. There are numerous coins that have come into existence and this has introduced volatility on the market. Investors have very high chances of enjoying massive gains.
- Low Inflation
Bitcoin is not regulated by governments or any other institution and this gives it immunity to inflation. This means that you will not need to worry about your coins losing value due to inflation.
- Easy Trading
Unlike traditional stock trading where you will need a license or certificate, Bitcoin trading is minimalistic. You can just buy and sell coins without any limitations.
Even with the exciting advantages that Bitcoin investment offers, there are some risks that you need to be aware of. Here some of the main disadvantages of investing in Bitcoin:
- No Regulation
There are no major regulations that govern the Bitcoin market. As such, you can easily get involved in malpractice or fraudulent activities.
- Online Hacking Threats
Hacking is one of the biggest worries for Bitcoin investors. Since this is a digital currency, you may end up losing all your coins when hackers are able to access your digital wallet.
- Highly Volatile
Bitcoin prices are highly volatile, which is a major worry. The constant changes in the market can leave you with serious losses. For instance, in mid-April, the price was over $64,000 and weeks later it was about $30,000.
What is in the future for Bitcoin?
There are so many things that are happening in the Bitcoin market, which will shape its future. El Salvador has decided to make Bitcoin legal tender and Tesla has plans to resume Bitcoin transactions. Bitcoin is an investment that is hard to ignore but you will have to tread carefully when making your investment. Consider all the gains and possible risks and make an informed decision.