Bitcoin Investments – An Analysis of Pros and Cons

These days if you have internet access it is impossible for you to not have heard of bitcoins and cryptocurrency. People have been all about bitcoins for the fall of the last decade. Since its launch, it has been under the spotlight of every financial news channel. However, it gained popularity in recent years. Since the late 2010’s bitcoins have been a top investment opportunity with them giving 1000% returns after their launch. Therefore, it makes absolute sense that many people are interested in making a move in the crypto markets and investing in bitcoins. Many financial analysts have predicted that the prices of bitcoins are bound to go as high as a billion dollars. Hence, if you are a new investor and wondering whether you are making the right move or not you are in the right place. Here is a list of pros and cons that will help you understand if bitcoin is the right investment opportunity for you or not. If you are into cryptocurrency trading, you can visit World Of Cryptocurrency for more information.

Pros:

The major reason why bitcoins have been so famous as an investment opportunity is because of the many advantages of investing in them.

Fast and Easy Returns

Bitcoin investments have been synonymous with fast and easy returns. As said previously we have seen immensely high returns from investments in bitcoins. The major reason behind this occurrence is that there is essentially a supply gap with the demand for bitcoins. Since only 21 million bitcoins can exist it has created a gap in the demand and supply causing the prices to rise.

The scenario is not always the same. The supply-demand of the bitcoin ratio continuously changes depending on many factors. It results in volatile movement. Though, it helps traders to earn a good amount of profit in short-term trading.

Anonymity

The entire operation of blockchain emphasizes the anonymity of the holders. Many people have been quite at odds with the government for their unnecessary intervention in every aspect of their lives. This is what essentially led to the creation of bitcoin. Blockchain technology offers anonymity to the users and keeps the government and banks out of it. Most users are attracted to bitcoins majorly because of this.

Universality

Unlike fiat currencies, bitcoins are universal. Not only are bitcoins universal but they are also extremely accessible because they are open-sourced. It means that anyone with access to the internet can attempt to buy or sell bitcoins from anywhere in the world. Although the countries’ guidelines can be different, bitcoin’s functionality is the same for all the countries in the world. That is why fast and less chargeable international transactions can also be done with bitcoin.

Cons

Highly Volatile

One of the major drawbacks of investment opportunities with bitcoins is that they are extremely volatile. Since the cryptocurrency exchange markets do not have any regulators it makes them susceptible to high volatility. There are no regulations in place that safeguard small investors. Not only this in such markets the bigger players are king as they can make the prices rise or fall depending on the wish and trading practices. Therefore, this can be very tricky for small and new investors.

Loss

If you have even remotely thought about investing in bitcoins you may have received warnings from people telling you that you may lose all your money. One of the major reasons why bitcoins are exposed to the high risk of loss is because they have no value in the legal tender system. This means that since the government has not recognized them as assets it creates a problem for full-time investors. On top of that, they are volatile. So, any kind of loss in this market will not be taken care of by the government. Therefore, it is important that you pay attention to the recent trends in the market and then make a sound decision on investing in bitcoins.

Limited Use

As highlighted previously, one of the drawbacks of bitcoins is that they are not backed by any government agency. Since these are not backed by any government agency they are also not accepted as legal tender in exchange for goods or services. However, some sections of shopkeepers do take payments in bitcoin but it has still not even reached a 50% adoption rate all over the world. Therefore, it has very limited use.

Conclusion:

Hence, as you can see these are some of the pros and cons of engaging in investment in Bitcoins. Though they are essential, you also have to choose the perfect platform for bitcoin exchange.