You want to become a Bitcoin trader, don’t you? You’re not all that different from the thousands of people who decide to get into the industry every day, at least for now. Many prefer Bitcoin and other cryptocurrencies to other forms of investments like the stock market or real estate for the perceived possible gains.
These coins can frequently halve or double in value with minimal warning, allowing for big gains, but also big losses. It’s a much-nuanced form of trading that the rules are still being drawn up for, since most people involved are just trying to retool existing investment advice to better suit this new medium.
Let’s look at some of the benefits and drawbacks to this kind of trading:
Pro: Increasing adoption rate
In previous years, any monetary gains realized through trading BTC were in the form of receiving more fiat currency than you paid to obtain that amount of coins. Now that there are a multitude of vendors across the world and the Internet accepting BTC as a legitimate means of payment, there’s less need to convert coins back into a “normal” currency to actually spend your carefully gained riches. This cuts down on transaction and conversion fees and allows users to directly make use of their BTC.
Con: Susceptible to fraud
Once Bitcoin has been transferred to another party, it’s extremely easy for them to disappear without a trace. This has led to many different scams from unscrupulous individuals who create a trading service, but don’t actually intend on paying back any of the money they’ve been given. Of course, by reading the full review of any of these services, you’ll get a much better idea as to whether or not they are above board. Stolen BTC is often smurfed into other wallets before becoming untraceable entirely. If the people who conducted the scam covered all of their tracks adequately, there’s virtually nothing that can be done.
Pro: Easy international exchanges
Bitcoin is extremely easy to trade over international borders since there’s no discrimination as to where BTC is being sent to in the world. A transaction is simply made on a wallet-to-wallet basis with little care in the world. Bitcoin can be effectively turned into just about any currency, thanks to this. This means that some people choose to hold Bitcoin as a form of “universal currency” that they can later convert into notes they intend on using.
Con: Highly volatile
Current news events, as well as the mysterious nature of Bitcoin, have made it an extremely volatile investment. Bitcoin has halved or doubled in as little as a day many times over its lifespan, making it not very appealing as a choice to those who are particularly risk-averse.
As with all kinds of trading, Bitcoin is hardly the guaranteed path to riches that many services make it out to be. In theory, all BTC could be worthless tomorrow due to new legislation around the world, or it could grow exponentially in response to mass adoption. The decentralized nature of BTC and how simple it is to exchange allows the investment industry to continue using BTC for now. But then, it’s yet to be seen how long trading BTC will be a viable option for those looking to increase their personal wealth.