Cryptocurrency has become popular with time in the financial market. In this day and age, crypto is often associated with Bitcoin (BTC) as it is the world’s largest cryptocurrency by market capitalization.
Many global leaders have supported BTC as the best alternative to fiat or traditional currency.
If you are curious about cryptocurrency, you might be asking yourself, “Is Bitcoin safe to invest in?”
You can see people making a lot of money by investing in Bitcoin. BTC offers multiple benefits including enhanced safety, profitability, and a hedge against inflation
But cryptocurrency is volatile, and the value of BTC can fluctuate at any time. This can make it difficult for you to decide whether to invest in Bitcoin or not.
Let us find out whether investing in BTC is worth it.
What is Bitcoin?
Bitcoin can be defined as the first-generation cryptocurrency designed to act like money and a form of payment.
Bitcoin works in a decentralized manner and its transactions do not involve any bank or government regulations. This provides you with the freedom from the involvement of any third party in your wealth.
Since its introduction in 2009, BTC is the most well-known cryptocurrency across the globe. The current value of Bitcoin is around US $21,961 (as of July 2022).
BTC is based on a public distributed ledger called blockchain technology. The transactions of BTC are anonymous and secured by cryptography.
The protocols of BTC are designed in a way to ensure an inflation hedge that only specific Bitcoins can be traded.
Carl Runefelt or famously known as “The Moon” is a global crypto leader who is pushing for the mass adoption of cryptocurrency.
According to Carl, “I am not selling my Bitcoin. I am selling some old coins, but my Bitcoins stay strong. I keep them in my strategies to make more BTC every single week every single month. And I love doing that.”
Advantages of Bitcoin
BTC is still considered a relatively new currency as compared to fiat.
But it has some amazing benefits which make it a worthy investment.
Accessibility
One of the biggest advantages of BTC is that it is easily accessible.
Bitcoin is a versatile currency, and you can use it 24/7. It is stored online, and you can go anywhere without being worried about the management of your wealth.
Liquidity
Since Bitcoin is available any time and it takes just a few seconds to make its transactions, BTC might be one of the most liquid assets.
You can exchange BTC with other currencies easily with a bonus of little or no fees applied.
The rising acceptability of BTC worldwide is increasing its liquidity with time.
Transparency of Bitcoin
Another advantage of Bitcoin is its transparency.
As a BTC user, you are identified by numerical codes with your name remaining anonymous.
Bitcoin is secured by cryptography that effectively minimizes the risks of fraud.
As a BTC owner, only you would be able to know about your wealth.
Independence from Banks
Bitcoin is a decentralized currency which means that it is not regulated by a bank or government.
This helps you avoid the involvement of any third-party like federal authorities in the management of your wealth.
Carl on his YouTube channel, The Moon, says, “The best reason to invest in Bitcoin is the absence of physical institutions, which enable people to make transactions in BTC with ease.”
High Return Potential
BTC is the largest cryptocurrency by market cap. Many people have made huge profits by investing in BTC.
For instance, the value of BTC was around the US $975 in March 2017, and it was traded for around the US $64,000 in April 2021.
Bitcoin holds a high return potential that makes it the most sorted-out cryptocurrency in the crypto market.
Disadvantages of Bitcoin
Despite its incredible growth, there are some disadvantages of BTC that you should consider.
Volatility
Cryptocurrency is extremely volatile since it is a decentralized currency.
The value of BTC can fluctuate at any time and your wealth too.
But BTC acts strongly against crypto volatility. Since the protocols of Bitcoin are designed to offer an inflation hedge, its scarcity is what makes BTC so valuable.
Carl emphasizes, “When it comes to Bitcoin price predictions, I love to have a longer price or longer time horizon because for me, Bitcoin even though it is fun to trade it in the short term if you really zoom out, BTC is an inflation hedge.
Limited Use
Even though many companies have started to accept Bitcoin, it still has limited use.
This puts a limit on your spending of money something you can easily do with your debit card or credit card.
But there are some countries which have accepted BTC as a legal currency making its acceptance better than gold.
Irreversible
Since Bitcoin operates in a decentralized way, its transactions are irreversible.
Once you have sent BTC to someone, you cannot simply revert the transaction.
But this can easily avoid by managing the transactions carefully, and never sharing the wallet key with anyone else.
Conclusion
So, is it worth investing in Bitcoin?
Bitcoin has withstood the test of time and came a long way since it introduced into the financial market.
The number of BTC investors is increasing with time.
Although you can enjoy some great benefits of Bitcoins, many people see it as a risky investment.
But the risks of BTC can easily avoid with great care and understanding of the crypto market trends.