Investing in Bitcoin – pros and cons
The past year was full of surprises, but there was one that made a lasting impact on the world economy and the way we perceive finances and investments. Bitcoin broke down every record the public, the experts, and the skeptics had put on it, and proved that anything is possible.
By offering a total transparency in financial exchange (meaning you can manage your Bitcoin balance without the third parties involved and without submitting to their policies), Bitcoin is an appealing investment for everyone who is looking for a high-risk high-return type of investment. No matter how attractive it might sound, there are still uncertain things that need to be resolved. In this article, I will try to lay out the pros and cons of Bitcoin investing.
Note that I’m not offering a financial or investment advice, merely summarizing the information about Bitcoin investing that can be found on authoritative websites. For an expert advice on how to make a profit out of Bitcoin investment, please consult a professional.
High profits are something that’s on top of anyone’s mind when it comes to investing in Bitcoin. Since the cryptocurrency world just started evolving, there’s an advantage for people who are seeking to make some profits in the marketplace. High profits create high demand which makes the market more volatile but also more profitable over time.
The fact that significant companies like JP Morgan are made their investments in Bitcoin offer a great piece of credibility to the smaller or medium investors. Although there are higher risks associated with investing in Bitcoin on a smaller scale, the fact that bigger players are into the Bitcoin game gives the proof that Bitcoin is not a scam.
If you’re not into a conservative, long-term investing, Bitcoin is a great deal for you. The fact that you don’t have to wait for ICO to go public or to get acquitted gives you the room to make a fast return on your investment. Another thing that’s encouraging is that you can freely and easily gather shareholders and put the money down on the marketplace – and with high chances to win a massive return.
High volatility is something that makes Bitcoin (and any other cryptocurrency) a high-risk investment. If you’ve been watching the price trends in the past few weeks, you could notice that the drops and rises are extreme. Even though it can be a good sign, for those who are more conservative, it can be an immediate turn-off. If you’re not ready to make a severe investment in Bitcoin, you can start with a smaller amount – but the return will be minimal.
The thing that very few are considering when talking about investing in Bitcoin is a potential network stall. Since every Bitcoin needs to be mined (created through the process that’s called mining which usually refers to the process of putting together algorithms and codes to produce a unit of Bitcoin), it’s reasonable to assume that there would be a shortage of this asset. The lifespan of cryptocurrency is the big question since it relies solely on the digital world. That fact is something that anyone considering to invest in Bitcoin (or any other currency) needs to have in mind before investing.