Bitcoin Blockchain technology investment contains both advantages and risks. The risks in Bitcoin investment are mainly due to the high volatility factors. But, what makes Bitcoin makes advantageous, and what makes financial investors drawn to it? Here also the same reason applied- the high volatility.
For years, people are investing in bitcoin. Initially, when all the strategies were not developed to particularly cope with this market, people used to follow long-term trading or mid-term trading. However, short-term trading proved to be a vital advantageous factor for the bitcoin market.
However, there are several other factors also behind making this asset potential for high return as well as vulnerable. Let’s understand all the factors that are responsible for it.
Overview of Bitcoin Trading
Bitcoin, the first cryptocurrency was introduced in 2009 by Satoshi Nakamoto as a digital currency with a decentralized structure to make people comfortable and trustful in transferring their money to one another. However, with time, the currency gained so much popularity that it became a valuable asset for investment.
In the early days of cryptocurrency, people only invest their money in it for the long term in the hope to get high returns as those days the value of bitcoin was increasing for the first time. We also witnessed the highest price growth in 2021 when the price skyrocketed over $65,000. Investors of those days made huge profits out of that.
However, soon, bitcoin’s price started fluctuating rapidly and it was started considered the most volatile currency or asset. Irrespective of how much price it gains, it also drops to a minimum level several times. Now, the price of bitcoin is below $30,000 as of September 2022.
Biggest Risks You’ll Face When Investing In Bitcoin
There are certain risk factors in bitcoin investment. Some are direct with the asset and some are related. These are,
The main risk factor in bitcoin investment is volatility. It is such volatile that in a moment all your invested money can be lost if you imply the wrong investment strategy.
Another risk is its digital presence which makes it prone to online scams. Though the bitcoin network claims to be very safe and secure, you can’t rely 100 % on any digital platform.
Some experts also think that bitcoin’s decentralization technology is a risk factor. No governing body is controlling or operating it and all the transactions are direct from user to user. So, fraud people can make unauthenticated transactions here.
Online Trading Platforms:
Most of the online trading platforms through which bitcoin and other cryptocurrencies are traded are third-party operated. So, scams can also happen here if you choose an unreliable platform.
Bitcoin Hot Wallets:
Bitcoin hot wallets are always connected to the internet. So, they are very risky to get hacked. And once they are hacked, you lose your private key and hence all your bitcoin holding.
The Advantages of Bitcoin Investment: What You Need to Know
Though the bitcoin market is volatile it also brings high returns to whoever plays the trading game wisely. The factor here is surprisingly volatility. Volatility means ups and down in prices and these are the most needed things to make a profit. You should consider buying bitcoins when the price is low and, on the other hand, sell them when the price gets higher. In the spread, you gain a profit. That is how the volatility of bitcoin is helping to make profits for the traders.
Easy and Direct Trading:
Bitcoin platforms as well as bitcoin’s own network are very convenient and less-time taking to operate. If you choose a genuine platform like https://bitcoin-pro.app/ your trading experience gets well. These platforms offer several trading tools that also help in minimizing your risks and understanding perfect trading strategies.
Utilization For Buying Things:
The way bitcoin is being adopted by businesses in the world, it will someday possibly become accepted by every online as well as retail shop as a medium of payment. A lot of company welcomes bitcoin payment from their customers now. Investing and having bitcoins make it possible to avail of the services to buy things from these companies.
Bitcoin investment is not only risky but advantageous too. The main concern here to get the advantages from it is to manage its risk factors. Once you learn to manage and mitigate the risk factors, you will make more profit out of bitcoin investment and enjoy its advantages. I hope you like this article.