Are you interested in investing in Bitcoin? Have you put off investing because you’re worried about the risks?
While putting your money into crypto can be intimidating, it may be time for you to join the 145 million Americans that have taken the risk. When investing, it’s important to have as much information as possible. With so many resources out there, it’s hard to determine which ones are accurate.
We’ve put together this guide so you can make an informed decision this year about Bitcoin investments. Read on to learn about the pros and cons of investing.
Pro: Accessibility and Liquidity
One of the best benefits of Bitcoin is its accessibility. It only takes a few minutes, if not less, to transfer from one user to another. Unlike other investments, you can use them to purchase goods and services from establishments that accept them as a form of payment.
You can also use it in other countries. This makes it easier to exchange currencies. There aren’t many exchange fees either, which is another added bonus.
Pro: Lower Fraud Risks
Another factor that is often appealing to investors is the low risk of fraud. It’s easy for people to keep their transactions private. No one except the wallet holder knows how much is in it.
Your information can’t be sold. It’s stored in blockchain technology, making a system breach impossible. Hackers don’t have access to your investments and they are completely confidential.
With this high security and safety guarantee, you’re about to make transactions without fear. You have power over your investments, which isn’t always true when you’re investing in the stock market.
Pro: Available 24/7
Another advantage that Bitcoin has over traditional investments is that you can access it 24/7. The Stock Market is only open for certain hours and closes on major holidays.
No matter where you are in the world or what time it is, you have access to your cryptocurrency. You only have to wait a few minutes, maybe a few hours, to send and receive Bitcoin.
Whereas with traditional investments and bank transfers, you often have to wait for days or pay high fees. If you have family overseas, you can send them Bitcoin immediately, which can come in handy if there’s an emergency.
Con: Volatility Risk
One of the downsides of Bitcoin investments is they are volatile. The value can change rapidly without any warning.
Satoshi Nakamoto created Bitcoin, and he put a limit on how many could be made. That number is 21 million. Since there’s a limited amount, the price is the only thing that changes to ensure demand.
There are several factors that influence the volatility of Bitcoin. News headlines, security breaches, and worry about future value are all relevant and ever-changing.
Pro: Fixed Supply
Another one of the best Bitcoin benefits is the fixed supply. Scarcity is important when it comes to investments, and Bitcoin has that. Since there is a fixed supply, it will become more valuable.
However, not everyone knows about Bitcoin. Many countries and places around the world don’t have access to it and many supplies still don’t accept it. Since some places don’t accept it as a real and true form of currency, it’s a little riskier.
Con: Not Widely Accepted
Bitcoin is not accepted everywhere. This means you are limited in where you can spend your money, unlike having a credit card.
More places are started to accept the currencies, but you can’t solely depend on Bitcoin. You need other forms of currency.
Pro: Anonymity and Transparency
As a Bitcoin user, you will have an individual numerical code. This allows your transaction to be completely anonymous.
There’s no way to trace the transaction back to you. The transactions are viewable, giving complete transparency, but there’s no way they can be tied to you. With bank transactions and other investments, there’s a higher risk of your information being leaked or hacked.
Since all transactions are visible, investors see Bitcoin as a fairer and safer way to trade. You don’t have to put your trust in any third parties.
The 2000s recession had many people questioning the banks and intermediaries. With Bitcoin, you can see your transaction from start to finish without consulting or relying on someone else.
Your Bitcoin transition is final. If you send the wrong amount or send the currency to the wrong location, there’s no way to undo it. That means there’s a chance you could lose your investment.
In order to avoid this unfortunate situation, review all the information before you click send. Crypto wallets are very popular among investors, but they come with a risk.
If the user loses access to his/her private key, their investment could be gone forever. If your hard drive crashes or a virus takes over, your investment could vanish in seconds.
Pro: Independence From Central Authority
When going through the list of pros and cons of investing in Bitcoin, independence from the central government is at the top. The government doesn’t have control over the currency. Which means you will have more control over your money.
There’s no way to implement viable taxation on Bitcoin. The government has no authority to freeze or take your Bitcoin.
This is why many users invest in cryptocurrency. It’s a way to stand independently from the government and banks. In countries where people don’t have a lot of property rights, Bitcoin can be a great way for them to take control of their future.
Con: No Government Regulation
While many people see independence from a central authority, there are some potential downsides that you need to be aware of. Since there are no regulations by the government, there is less protection.
For example, if a few large investors decide to sell all their Bitcoin, affecting other users who have large amounts. There is no minimum valuation. This increases the chance of scams.
Pro: High Potential for Return
One of the reasons so many people invest in Bitcoin is the high potential for returns. Some believe that the prices being highly volatile is dangerous, and some see it as a way to increase their investment quickly.
As more people and more countries start investing in Bitcoin, the better. It increases your chances of making a bigger profit. If you bought at a low price, you’ll be sitting in a good position when the prices increase.
Often time people think they need to have a lot of money to start investing, which simply isn’t true. Even small investments in Bitcoin can yield high results.
Bitcoin has been around since 2009, which isn’t a long time compared to traditional investments. However, many experts believe that Bitcoin will be a valuable long turn because there is a limited supply.
Con: Learning Curve
Bitcoin is becoming more well-known, but there is still a learning curve. If you aren’t familiar with the concept of cryptocurrency, it can be riskier to invest in it.
When you’re deciding whether to invest or not, you need to have the time, energy, and commitment to learn about it. The more you know, the better your chances of making a profit.
Before throwing your money into crypto because that’s what other people are doing, truly take the time to learn about the currency and how it works. This will give you what you need to do to be successful.
When you’re researching, consider working with a professional. An expert can help you move forward with your purchase in confidence.
Pro: Helps Beat Inflation
As the United States government continues to print money, many investors are using Bitcoin as a way to hedge against inflation. There’s a set amount of Bitcoin, more cannot be made, making it resistant to inflation.
The government and other financial institutions cannot change or manipulate the price of Bitcoin. Other factors affect the price, but it’s still at less risk of inflation than other investments.
Pros and Cons of Investing
Investing is difficult. It’s a great way to build wealth, but it’s not without risks. There are many pros and cons of investing, specifically in Bitcoin, but it’s not enough to read through the list.
It requires more research. Rushing into an investment is never a good idea, but don’t steer away from Bitcoin because you’re intimidated or don’t know much about it.
There are plenty of ways to start investing. For more resources, information, and advice, contact us here. Our team of experts is available to answer any questions you have, don’t hesitate to reach out.