There are a growing hype and excitement about investing in bitcoin in the crypto market. A lot of people from within and outside the market, all around the world are now thinking of entering the crypto market via bitcoin investment. However, along with this hype and positive feelings, bitcoin has also invoked uncertainty and fears among the investors such as its riskiness, underlying long term volatility, and the level of frauds and scams that BTC has been exposed to.
In this article, we have identified some of the most common concerns of investors regarding the cryptocurrency market in general, and BTC in particular. These concerns are categorized as follows:
Is the riskiness associated with bitcoin beyond the limits of an average investor?
Market analysts believe that relative to the other investment options in the global financial and capital markets, Bitcoin tends to be riskier due to its inherent volatility. This is due to several other reasons which distinguish BTC from another crypto within the market and other investment options from other markets as well. There have been multiple occasions in the past, when soon after skyrocketing in terms of its price per coin, bitcoin fell down sharply to lower levels yet again. Also, visit https://immediatebitcoin.io/ if you want to learn about automated crypto trading and are looking for an efficient bot to trade your bitcoins through.
Although this inherent risk brings with it an incentive of matching returns, there are also massive losses that outnumber the big gains.
Market experts recommend researching the market thoroughly and doing technical analysis on both, the past trajectory of the prices to the future short-term and long-term price forecasts before actually investing great sums of money in bitcoin.
Also, experts recommend keeping bitcoin for the long-term. This is due to the fact that there is a limited supply of bitcoins I.e., 21 million coins, of which 18.5 have already been mined. This signifies a demand increase in the long run and a guaranteed price rise as well.
Is bitcoin wallets a safer and secure option?
The safety of the storage of bitcoin has been a concern for a lot of investors and crypto traders for the last years.
Several incidents of thefts, frauds have occurred in the recent past, due to which individuals and companies have lost millions of dollars’ worth of assets. The most obvious effect this has on the average investor is that this makes the investor doubtful and skeptical of investing in BTC altogether.
Blockchain is basically the digital ledger where all the bitcoin transactions and their information of all the users is stored. A crypto wallet also comprises a unique and special series of a combination of both numbers and letters. After gaining access to these keys, the hacker or fraud would gain access to your crypto storage and could potentially steal all of it. However, the hacker can also be traced and it is still very tough to gain access into someone’s storage and steal their bitcoin.
Analysts in the market and experts suggest to the beginners and new entrants to be confident and careful at the same time because although there is a chance you might lose your crypto, it’s very slight since the BTC system is really tough to hack. The BTC system consists of an entire worldwide network, and to hack it, one would require a tremendous amount of processing machinery, time, and also a lot of money to do so. Thus, it’s very tough to hack
People should know that it’s not the bitcoin itself that is so insecure or unsafe, but it’s the management of it that determines its level of safety.
Is Bitcoin usable as a protection against inflation?
People usually compare BTC with gold, given their similar characteristics, such as they both can be used as a hedge against inflation and domestic currencies and that both of them can outlive any global economic collapse.
Analysts believe that BTC is the best source of protection of the purchasing power owing to the fact that the total supply of BTC is limited, as discussed earlier.
However, experts suggest that this factor mainly depends upon the period of time you buy or sell bitcoin in. This greatly determines how much you have protected yourself against inflation in real terms.
The only thing, however, which makes bitcoin different from gold is its massive underlying volatility.
Is BTC Easily Convertible to fiat?
Right now, the most common transactions on bitcoin are carried out by converting BTC to the specific fiat currency, for example, the U.S. Dollar. An example is how PayPal announced that they will be introducing a feature that will allow its users to use crypto to fund their purchases. This basically means that the payment of a user in BTC will instantly be converted into the respective fiat currency.
Currently, this whole process of conversion between BTC and fiat currency, however, is quite time-consuming.
Also, another drawback of paying with the BTC alone was the fee charged to process those transactions as well. However, experts believe that a few of them will most probably get reduced in the coming time.
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