Bitcoin is the alluring investment for many with a high degree of volatility. It is still early to say how much potential Bitcoin has for its long term investment. Currently, investors are interested in only short term spot trading investments. It was banned by Reserve Bank of India in March 2018 but the ban was struck down by the Supreme Court in April 2020. Bitcoin remains the undisputed leader of cryptocurrencies with no other currency coming even close to its market valuation and capitalization. It has a thrill in investing due to the volatility in the market price. it can go from higher valuation to seeing red the other day. But still, the price is capped at $9,178.61 which is impressive.
Advantages of Investing in Bitcoin in 2020
There are advantages in the trading of Bitcoins because of its hype and shine as the king of cryptocurrencies where it has till now maintained it highest market valuation with no other cryptocurrency coming even close to the valuation commanded by it.
Lower inflation risk
Unlike world currencies that are regulated by the respective governments, Bitcoin is not prone to inflation. The blockchain system is infinite and there’s no need to worry about the cryptocurrencies losing their valuation.
Bitcoin is high in liquidity investment due to the world over the establishment of trading platforms, exchanges, and online brokerages. Anyone can easily trade Bitcoin for cash or assets like gold instantly with incredibly low fees. The high liquidity associated with Bitcoin makes it a great investment valuation if you’re looking for short-term profit. Cryptocurrencies can be long term investment too due to its high market demand.
Stock trading requires you to hold a certificate or license. You must also go through a broker to trade a company’s shares. Bitcoin trading, however, is minimalistic. Simply buy or sell bitcoin from exchanges and place them in your wallet. Bitcoin transactions are also instant unlike the settlement of stock trading orders, which can take days or weeks.
Bitcoin and cryptocurrency trading is a comparatively new phenomenon. There are many numbers of new coins that are becoming valuable in the market on a daily basis. This aspect of Bitcoin and other cryptocurrencies gives it a new shine where they are capable of giving an investor massive gains due to its high volatility and swings in the market.
All these advantages make the investment in Bitcoin a highly rewarding and exciting opportunity at least on a perceived basis. Investment can lead to large swings in the market considering the volatility of the Bitcoin pricing. Along with the advantages that an investor can expect, there are various disadvantages as well that he has to keep in mind while investing:
Disadvantages of Investing in Bitcoin
Hacking is a big threat facing the Bitcoin investor because Bitcoin exchanges let you buy and sell cryptocurrencies using a mobile app or website. This leaves them prone to the hacking of the investment made. If you want to make your digital transactions or assets secure, you should look for a platform that offers multi-layer security. PCEX Member is one such coin trade platform in India that offers multi-layer security to ensure the security of every trade happening on the platform.
No regulatory framework
The bitcoin market currently operates without well-founded regulations. Governments around the globe have no clear stance on it. Resultantly, there is a risk of fraud and malpractice.
Use is limited
Currently, Bitcoin is only accepted by a few online merchants. Many merchants and companies don’t even recognize Bitcoin as a legitimate exchange currency. This makes it an unfeasible investment opportunity. Also, there will only be a fixed supply of Bitcoin capped at 21 million.
As Bitcoin and other cryptocurrencies are a relatively new phenomenon in the market, it will be wiser to have a check over the market information for the shift in the volatility of the market. Remember, the market remains bullish as far as Bitcoin is concerned for the present. It will have to be seen whether the same status will be maintained by Bitcoin in the coming future. One should also keep an eye on the current volatility and fluctuations that the Bitcoin witnesses due to its limited acceptance get rectified in the coming future.