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Pros and Cons of Buying Cryptocurrencies

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You may have heard of Bitcoin. Bitcoin in 2017 was able to hit almost $20K. Speculation was the primary reason why Bitcoin was able to surge from just $1,000 to near $20K level. And today, there are a great number of other cryptocurrencies to choose from. The reason why Bitcoin was made in 2008 was in order to have a currency that isn’t affected by economic disasters such as the 2008 financial crisis. It isn’t tied to any central bank making it decentralized.

Have you considered buying cryptocurrencies? When it comes to investing cryptocurrencies, you will need to understand that there are pros and cons. Considering the pros and cons prepare you to the risks that you are going to face. And also, it prevents you from over-committing when it comes to buying digital assets.

Pros

Decentralized technology

No matter what countries do to ban crypto exchanges, it is impossible to stop the use of cryptocurrencies. This means that peer to peer trading can still work. But of course, it might be slow, but it means that it can still be used for transactions and for trading regardless of any intervention by the government.

Bitcoin has always recovered

Another important note when it comes to Bitcoin is that it has always come back despite massive correction. Bitcoin lost around 80% of its value since it reached near $20K value. However, the fact is that historically, Bitcoin has always come back to reach a new high. Will this be the case with Bitcoin?

Different options to choose from

Are you a speculator? The reality is that there are a lot of other cryptocurrencies to choose from. You can choose from XRP to Ethereum to Bitcoin. Different cryptocurrencies have their different uses. For instance, Ripple’s XRP is more for reducing the cost of cross-border transactions.

Cons

Volatile

Now, if you are expecting Bitcoin to become your asset for early retirement, remember that it is unpredictable. The news could spiral Bitcoin out of control. And also, an approval from the regulators could have it go up. The point is that it is highly volatile. If you are someone who has a low-risk tolerance, this isn’t something that you should go for.

No Regulatory Clarity

Though it can’t be stopped by regulators completely at this point, cryptocurrencies are still not getting adopted because there are no laws that govern them specifically. All over the world, there are only a few countries that can be considered pro-crypto.

Hacks

Now, you have crypto exchanges that are prone to hacking incidences. Hacking can endanger your funds if you are too careless when it comes to leaving your crypto in an exchange. However, there is a solution that you can go for. You can just buy a cold wallet and have it stored. However, you need to remember your verification pin. Forgetting the pin means that the crypto isn’t going to be accessible anymore.

If you are going to invest in cryptocurrencies, it is important that you are going to know the pros and the cons. The last thing that you want is to invest more than you should and end up losing your money.

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