Pros and Cons of Trading Bitcoin

By Olaotan Richard | Jul 19, 2018
Bitcoin seemingly came out of nowhere and suddenly became what is widely referred to as the currency of the future.

New York —

Bitcoin seemingly came out of nowhere and suddenly became what is widely referred to as the currency of the future.

The digital currency has been around for a while now and in that time, has grown by leaps and bounds. That has pushed a lot of people into wanting to invest too especially in a bid to catch the next boom and maybe share from that get-rich-quick cake.

However, the cryptocurrency niche is not as straightforward as it looks from the outside. While there are advantages to getting invested, there are likewise a lot of upsides to it.

We will be reviewing the pros and cons of getting involved in the bitcoin trading business under the headings below

Pros

1. It is like gold

Bitcoin is one of the digital representation of what we have physically as gold today. Even though times could come when the currency would lose some of its value, it would not get to the point where it loses it full value.

Likewise, since it is the first cryptocurrency on top of which the blockchain was built, there is surety that people will still keep trading the currency no matter what

2. Provides a hedge against uncertainties

One of the many beauties of bitcoins is that they are decentralized. That is in the sense that the currency is not limited to any country and as such, cannot be regulated by any one body.

By so doing, bitcoins are not subject to those fluctuations and manipulations by traders and central banks or other currency regulations. In a nutshell, your investment will be safe against the usual market uncertainties.


3. It has momentum

You wouldn’t have sought out this piece if you had not observed the kind of momentum being gained by bitcoins in the currency trading market. At this rate, it looks like the only place where the currency can go is up.

Although there are notable drops from time to time, the currency is one known to rebound into a stable zone for growth in little time.


Cons

1. Instability

Even though no country is in regulation of the digital currency, it can still suffer from rises and falls too. No one knows the exact metric used to determine the plunge and rise rate meaning this fall could be so steep, some investors might not be able to recover.

2. There are other cryptos

While bitcoin was truly the first cryptocurrency to hit the market, there are a lot of them now to provide solid competition.

From current data, some of these other cryptos are even growing in value and community than bitcoin is. Such are Ethereum, Litecoin and Dogecoin to mention but a few

3. Volatility

While this is a little bit related to instability, they are different things.

Drops occur in money markets and they are to be expected but the volatility of bitcoin makes the investment not suitable for the faint-hearted. Bitcoins are so unpredictable, a drop of up to 40% could occur on the currency overnight, forcing a lot of people into panic positions.


Conclusion

Of a truth, there is no straight answer to the question of investing in or staying away from bitcoins. The decision should be made after understanding all the risks involved so that the investor is better prepared for any and all eventualities.

You can look at the detailed Whaleclub review if you are interested in the trading niche to know what to expect and how to better prepare to mitigate effects of the cons, whenever they do show up.

 

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