Cryptocurrency has earned a notorious reputation for being extremely volatile. The possibility of getting instantly rich or losing all your money are two sides of the bitcoin currency. However, cryptocurrency is a good investment for enthusiastic investors who wish to gain exposure to the world of digital currency.
Investing in Bitcoins involves a certain amount of risk as its price shift is impossible to predict, and it does not have a set pattern that can be studied. Moreover, the market is controlled by a handful of investors known as whales. In regards to that, cryptocurrencies are well-known for their frequent price fluctuation. However, with a market capitalization of $1 trillion and only 21 million Bitcoins to ever be produced, the platform is here to stay in the foreseeable future.
Risk Factors Involved In Bitcoin Investment
Most people have a common question on their minds: Is cryptocurrency safe? Well, let’s find out!
- Cryptocurrency exchanges are prone to hacking and other criminal activity. Such breaches have led to major losses for investors whose digital currencies were stolen.
- While investors can use offline storage options such as hardware or paper wallets, such options have their risks associated. An investor can lose his private key without which he cannot access his cryptocurrency.
- Whether a crypto project will flourish or not is anybody’s guess. Since there are so many blockchain projects, some of which are scams, fierce competition.
- The government may enforce regulatory measures and ultimately crack down on the crypto industry, considering it as a threat.
Reasons to Invest in Bitcoin
Bitcoin has proven its place in the digital currency world as a great investment tool. Hence, the concept of cryptocurrency investment has no doubt attracted investors from all over the world.The cryptocurrency offers several advantages, some of which include:
- Liquidity- Bitcoin is regarded as one of the most liquid investment assets. This is mainly due to the global establishment of cryptocurrency exchanges, zero brokerage charges, and the availability of convenient trading platforms. Regarding that, acrytocurrency investor can easily trade bitcoin for gold or cash with a nominal fee. The high liquidity makes bitcoin an excellent investment vessel for any investor seeking a short-term profit. In regards to that, Bitcoinalso serves as an excellent long-term investment due to its high demand in the market.
- Lesser inflation risk- The currency of any particular country is regulated by its government. Hence, these currencies are prone to inflation. On the other hand, Bitcoin is immune to inflation as the blockchain is limitless. In such cases, there are lesser chances of losing the price value of Bitcoins.
- Lucrative money making opportunities- The digital currency world is young and sprouting with each passing day. As a result, new coins are becoming a part of the mainstream. The fresh nature of the platform brings about an unpredictable nature in matters of price and volatility and gives scope for massive gains.
- Simpler process- Any normal share investor who wants to trade stock requires a license and go through a broker to trade a company’s shares. However, in case of tradingBitcoins, it is is relatively a simpler and smoother process. To get started, at first, you create an account which you will use to buy and sell Bitcoins.
Is Bitcoin a lucrative long-term investment?
Bitcoin is the most popular cryptocurrency, benefits from its hype. With the rise of cryptocurrency every day, the number of enthusiastic investors is growing. Investors view Bitcoin as “Digital Gold”, but it is just as liquid a form of digital cash. A great majority of investors believe that Bitcoin will gain value over the long haul because the supply of bitcoin is limited. This does not hold for fiat currencies such as the U.S. dollar or the Japanese yen.
As mentioned earlier, the supply of Bitcoin is forever limited to only 21 million coins.
Investors expect the value of Bitcoin to rise as fiat currencies depreciate. Bitcoin loyalists are investing significantly in Bitcoin for the long term as they feel it has the potential for a meteoric rise and turn into a global currency. For any more information related to the currency, using crypto genius would be a good idea. Learn about how to create an account, the dos and don’ts, and how to become a successful investor in the digital currency world.