ADVANTAGES

The overwhelming performance of bitcoin — as a currency and investment — has attracted traditional and institutional investors alike. Is Bitcoin a good investment? To be fair, it offers you several advantages over traditional investments.

Liquidity

Bitcoin is arguably 1 of the most liquid investment assets due to the worldwide establishment of trading platforms, exchanges and online brokerages.

You 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 vessel if you’re looking for short-term profit. Digital currencies may also be a long-term investment due to their high market demand.

Lower inflation risk

Unlike world currencies — which are regulated by their governments — bitcoin is immune to inflation. The blockchain system is infinite and there’s no need to worry about your cryptos losing their value.

New opportunities

Bitcoin and cryptocurrency trading are relatively young — new coins are becoming mainstream on a daily basis. This newness brings unpredictable swings in price and volatility, which may create opportunities for massive gains.

Minimalistic trading

Stock trading requires you to hold a certificate or license. You must also go through a broker to trade a company’s shares. But bitcoin trading 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 could take days or weeks

DISADVANTAGES

Bitcoin may be the future of monetary exchange, but it is equally important that you are aware of the concerns surrounding cryptocurrency investing.

Listed below are a few things that could make Bitcoin a bad investment. Balancing the pros and cons is often the most important thing an investor can do.

Volatility

The price of bitcoin is always rippling back and forth. If you happened to buy bitcoin on December 17, 2017, the price was $20,000. Weeks later, you couldn’t sell your investment for more than $7,051. While you'd be doing great now in 2021, holding for years at a time is not a viable option for all investors.

The threat of hacking

While Bitcoin's blockchain has never been hacked, individuals can still get hacked if they give out sensitive information, such as their private keys. Also, it's not uncommon for lesser-known exchanges to be hacked.