Pros and cons of Bitcoin investments you should know about
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Loading... - michael mia
- 10 Feb 2023
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Bitcoin is among the top most stable cryptocurrencies on the market. Although its course was filled with volatility issues and market expansions, Bitcoin remains the preferred cryptocurrency for a perfectly diversified portfolio. The Bitcoin price USD has reached a favorable phase at the moment, so you should check it out.
However, besides the good side of Bitcoin, the truth is that it might’ve become outdated compared to other cryptocurrencies that focus on sustainability, fast transactions and building communities. So, it’s not enough to invest in Bitcoin only ―you need an array of coins to balance its value properly and minimize risks. Therefore, we’ll analyze the pros and cons of Bitcoin investing and see if it’s really worth it.
No transactional borders
The most significant benefit of buying, selling or investing in Bitcoin is that it’s highly accessible. Therefore, it allows for international transfers regardless of the country. There are some exceptions, of course; some countries have permanently banned the usage of any type of cryptocurrency, such as China, Morocco or Tunisia. That’s not necessarily because people refuse crypto adoption, but since it’s pretty new to the market, taxation regulation isn’t set correctly, and crypto can be the subject of money laundering.
But besides the countries that have banned cryptocurrencies, Bitcoin can be used almost anywhere, especially since more companies and businesses have allowed crypto transactions within their systems. Bitcoin worldwide adoption has yet to happen, but the idea is under discussion. At some point, we’ll be able to use bitcoins just as we use fiat money.
Volatility
Among the biggest downsides of Bitcoin is its volatility levels. Since its development, Bitcoin has had a total coin limit of 21 million bitcoins, which is the first reason why it’s so volatile. This leads to a phenomenon of an increase in price as the circulating supply gets to the limit, which is close because there are approximately two million bitcoins left to be mined.
However, Bitcoin’s volatility is also caused by the following:
- Investor actions. As wealthier investors hold their bitcoins, others with fewer assets won’t have the same opportunities to gain exposure;
- News. Articles that present people’s opinions on a certain matter might not reveal accurate information, affecting investors’ choices;
- Regulation. Since there’s a long way until worldwide Bitcoin acceptance happens, the lack of rules impacts Bitcoin’s prices;
