The ups and downs of the Bitcoin market are becoming more unpredictable as the days go by. With more people taking an active interest in understanding the highs and lows of Bitcoin, many are worried that it might all just fizz out, leaving us with nothing substantial. So, whether Bitcoin will prove to be a great financial asset or not has to be understood with a deeper knowledge and perspective. Although some might feel that all is bleak concerning the world of cryptocurrency, there is much to be hopeful about as well.
When understanding the potential of Bitcoin as a financial asset, it is important to look into why you should or should not be investing in Bitcoin in the first place.
Reasons to Invest in Bitcoin
The imminent popularity of Bitcoin simply means that people want to make transactions with a decentralized currency. The reasons why you should invest in Bitcoin are as follows:
- It is virtually unaffected by inflation: Bitcoin is not governed by a particular centralised agency which makes it immune to the effects of inflation. Since the blockchain system is endless there is no worry that the Bitcoin you have invested in will lose value.
- They are an extremely liquid investment: There is no denying that Bitcoin undoubtedly has more liquidity than any other financial investment. Bitcoin can easily be traded for cash or any other asset making them an exciting financial asset.
- They are the currency of the future: Those who believe in the power of Bitcoin, speculate that cryptocurrency will become the most favoured currency in the future. In a world run by cryptocurrencies, Bitcoin will surely come in handy for those who invest in them now. Besides, since Bitcoin and other cryptocurrencies are still young and are yet to mature, they might offer new areas of opportunities for investors.
Reasons not to invest in Bitcoin
While there are several exciting reasons why you should invest in Bitcoin, you cannot deny the various risks associated with such an investment. The following are the reasons why you should be careful when investing in Bitcoin:
- Security threat: Since Bitcoin is not stored in a bank like a normal currency you are always under threat of being hacked by illegal agencies. There are various security threats that you must be aware of when dealing with Bitcoins. Choosing the right cryptocurrency exchange and wallets are hence of extreme importance. Any wrong move with Bitcoin can render you penniless.
- Bitcoins are extremely volatile: The volatile nature of Bitcoin is not something that people are unaware of. The value of Bitcoin swings back and forth within very short periods. Since they are not controlled by a particular agency, public opinion and popularity have a huge role in creating a sense of volatility when it comes to Bitcoin.
- They cannot be used everywhere: Since there is a huge amount of misrepresentation when it comes to Bitcoin, only a few traders and merchants accept it as a legitimate currency of the transaction. Hence you cannot make regular purchases with Bitcoin since only very few online merchants accept this form of payment. There is no guarantee that more merchants will adopt Bitcoin in the future.
- It is widely unregulated: The Bitcoin market is under no regulation. Most governments do not speak about it or show any favourable or unfavourable attitude towards it. Hence the Bitcoin market has been clouded with illegal activities and malpractice.
Keeping in mind the pros and cons of the long term potential of Bitcoin investment, you must consider it as a potential financial asset with care. You could also refer Bitamp opensource bitcoin wallet for sending and receiving Bitcoins instantly. To learn more about Bitcoin visit https://bitcoin-up.live/.