Bitcoin cryptocurrency (BTC) has been around for ten years, and during this time has attracted the attention of many investors, including traders with significant financial capabilities. Investing in bitcoin (usually long-term) is, first of all, an opportunity to invest in a fairly reliable and popular currency. Investors who have the grit and don’t get rid of their assets during periods of short-term decline in demand for bitcoin receive good dividends. Compared to investments in traditional currencies, investments in bitcoin give a greater chance of winning, which is explained by its unique property – the price of bitcoin is determined by the desire of people to pay certain money for it. And, since the total amount of bitcoins in the world is determined in advance, the longer this cryptocurrency exists, the higher the demand for it and the higher the price.
Bitcoin (Bitcoin) is the world’s first digital cryptocurrency, and it remains the most popular. Today, thousands of merchants around the world accept this currency as payment for their goods or services. Bitcoins can also be exchanged for regular money using specialized exchange offices or trading platforms.
The key feature of bitcoin is a limited edition, which protects this currency from inflation. The emission of bitcoins is decentralized – the “release” of new bitcoins is carried out by those who wish from all over the world using the computing power of personal computers. There is no single center for issuing this cryptocurrency. There is also no fee for transferring bitcoins.
Goals and objectives of investing in bitcoin
The practically unlimited growth potential of the bitcoin rate in relation to even world currencies – the euro and the dollar – makes it possible to make cryptocurrency a reliable investment object. Of course, you can and should earn money on the growth of the exchange rate. The main goal when investing in bitcoin is to create a thoughtful long-term strategy. An investor should avoid the temptation to “get rid” of the cryptocurrency at a time when the bitcoin rate shows an unexpected decline. It is also necessary to remember that the very principle of operation of the cryptocurrency ensures a stable growth of its rate, and the security of bitcoin is in no way inferior to the similar characteristic of the same euro and dollar. At the same time, the bitcoin rate is much less susceptible to fluctuations that occur with world currencies due to high-profile political and economic events.
Risks of investing in bitcoin
The risks of investing in Bitcoin cryptocurrency are associated, first of all, with the peculiarities of Bitcoin itself. Despite the fact that today this cryptocurrency is decentralized, bitcoin will gradually increase the desire for centralization. This is due to the fact that exchanges where they buy and sell this cryptocurrency are increasingly beginning to influence the bitcoin rate. In addition, the very “mining” of bitcoins is gradually concentrated in the hands of a fairly narrow circle of people – the owners of the latest technology that allows you to mine new bitcoins. More and more middle-income people prefer not to go broke for expensive equipment to get bitcoins, but to “mine” cheaper cryptocurrencies and exchange them for bitcoins. This trend leads to the creation of some “bitcoin mining centers”, which in itself threatens the decentralization of this cryptocurrency.
Another risk when investing in bitcoins is associated with the fact that all transactions with this cryptocurrency are open. Therefore, many can see how much bitcoins were bought, and in the case of purchasing a large amount of bitcoins, there are frequent cases of manipulation with the price of the cryptocurrency.
Finally, the anonymity of transactions using bitcoins in itself creates certain risks associated, first of all, with the risk of money laundering and the lack of state control over the turnover of bitcoins.