One of the most discussed topics in 2020 in the financial industry is investments, as more people are beginning to take their finances seriously while exploring options to earn more income. This has led to the spike in cryptocurrency investments and trading in 2020. There are now more users with over 40 million people worldwide using some type of cryptocurrency. Bitcoin currently accounts for $6 billion of daily transactions and the current market cap sits at $144.96 billion. The global blockchain market size is also expected to reach $57 million by 2025.
While there may be a lot of noise about bitcoin trading today, you must be familiar with the pros and cons before getting started with it.
PROS
Freedom to Pay
This is one of the most important advantages of using bitcoin and why many more people continue to embrace it as a preferred mode of payment. Unlike the traditional banking system, bitcoin allows you to pay someone else within seconds regardless of their location. Borderless transactions from the comfort of your home would save you time, effort, and money. This is possible with bitcoin since there isn’t any governing body or third-party institution involved.
Transparency of Transactions
Blockchain technology makes it easy to validate every transaction. This makes all final transactions available for the public eye to see but any personal or sensitive information will be hidden to keep your anonymity and prevent your transactions from being traced back to you. This transparency helps improve the security of bitcoin since it can’t be manipulated by anyone.
Low Trading Fees
One of the setbacks of traditional bank payments is the cost of transactions, which is always on the high side when sending across borders. However, bitcoin has relatively lower trading fees, especially for high-value transactions. This benefits many companies and investors and most importantly, small business owners and short-term traders.
CONS
Risk and Volatility
One of the biggest issues with trading and investing in bitcoin is the level of risk and volatility involved. Bitcoin is considered a high-risk asset, as the price tends to change over time, depending on several factors. This volatility can be both an advantage and a disadvantage, as the price could get extremely high and you gain a lot or it reduces and you lose a huge part of your money. This is why it is often advised not to trade or invest more money than you can let go, should anything happen.
Security and Risk of Theft
Security issues are everywhere and continue to increase as technology is improved. With bitcoin being a digital currency, users are not immune to theft or fraud. However, you can always work around this by ensuring safe security practice.
To get the most of bitcoin trading, ensure you use the right bitcoin wallet or exchange. There are several things to look out for while choosing a platform but security should be a priority. You can also look for reviews about it online, like how Inside Bitcoin reviews Bitcoin System. With more reviews from old and existing users, you will be able to make an informed decision.
