Resounding support has grown around Bitcoin over the past decade, and there are no signs of it slowing down. But it is still hard to determine whether this cryptocurrency will become a widely accepted store of value like gold or a global reserve currency. While the thrill of profits or losses is leaving many investors worried, some still want to catch on with Bitcoin’s popularity with the hope of earning massive gains in the coming time. Luckily, this cryptocurrency is not as risky as it was during its initial years of launch, so investors can take a sigh of relief shop amazon with bitcoin.
With Bitcoin taking center stage, it will be interesting to see what the future of Bitcoin holds. Bitcoin was accepted as a legal tender in 2021 by El Salvador, and other countries might consider doing something similar to attract innovation in their respective country. It can also happen that countries might ban this cryptocurrency altogether to save their fiat currency. If you plan to add Bitcoin to your portfolio this year or simply increase the amount of Bitcoin you hold in 2022, this guide will help you make an informed decision.
We’ve listed below everything you should know before investing in Bitcoin, so make sure you read till the end.
Advantages of Investing in Bitcoin
Let’s start with the positives first. Since the Bitcoin price is very high, not everyone can invest and get a good chunk of Bitcoin added to their portfolio. You have to assess both the pros and cons of Bitcoin before investing, so you know you’re investing in the right place. Since the exceptional growth and performance of Bitcoin over the years has attracted many institutional and retail investors alike, it is worth considering investing in it. But why you may ask? The following advantages of investing in Bitcoin can answer your question.
- Anyone Can Trade Bitcoins
Unlike stock trading, Bitcoin trading doesn’t require any certificate or license to start trading activities. Also, you don’t necessarily need a broker to buy or sell Bitcoin, which is mostly the case with stock trading. Bitcoin trading has always been minimalistic. Anyone can buy or sell this cryptocurrency from crypto exchanges and facilitate the movement using their crypto wallets. Bitcoin transactions are also instant, making the entire experience hassle-free.
Whether you want to invest, keeping the short-term and long-term results in mind, investment in Bitcoin can prove to be beneficial. Thanks to the availability of various cryptocurrency exchange platforms, crypto brokers, and trading platforms, Bitcoin is now one of the most liquid crypto assets you can own. You can easily trade it for cash or other cryptocurrencies like Ethereum, Polkadot, Dogecoin, Ripple, etc. The high liquidity associated with it makes this cryptocurrency an excellent investment. If you’re looking to further diversify your portfolio by adding some memecoins, consider investing in Shiba Inu, as you can buy it easily and convert SHIBA to INR or any other fiat currency whenever you want with ease.
- Lower Inflation Risk
Unlike most world currencies, Bitcoin is immune to inflation because world governments don’t control it. Luckily, the blockchain system is infinite, and you don’t have to worry about your cryptocurrencies losing their values.
Besides, Bitcoin is still young and evolving to reach its goal of becoming the currency of the future, so there is more scope for growth.
Disadvantages of Bitcoin
Now that you’re aware of the pros of investing in Bitcoin, let’s take a quick look at its disadvantages shared below:
Even after being one of the top cryptocurrencies, Bitcoin is not safe from the sudden price swings. For example, if you had purchased a Bitcoin in May 2017, its price was $20,000. But just a few weeks later, its price dipped, and you couldn’t be able to sell it for more than $7,051. Fast forward to 2022, its price is again soaring and touching the sky. It goes on to show how volatile Bitcoin is. If you cannot take sudden price swings, investment in Bitcoin might not be for you.
- Rising Competition
One major factor contributing to Bitcoin’s growth was its early entry into the cryptocurrency space. Back then, people didn’t have enough choices to choose from. But it is not the case anymore. With the introduction of utility-driven altcoins, the original position of Bitcoin might be at risk.
Investment in cryptocurrency should always be based on personal decisions backed by strong research. Now that you’re aware of both the pros and cons of Bitcoin, you should be able to make an informed investment decision.