What should you know before investing in Bitcoin?
It seems that no matter who you talk to or what page you visit, the topic of Bitcoins always comes up. And this market is full of opportunities for everyone.
Next, we will tell you what you need to know before investing in this cryptocurrency, from some warnings to the BitiQ opinions for you to take advantage of this incredible tool.
Without further ado, let’s start exploring the world of Bitcoin.
Very volatile market
The first thing anyone should know about Bitcoins, and any other cryptocurrency, is that it is very volatile; that is, its value can go up and down constantly.
This means that your investment could double in a matter of hours, only to plummet the next day or vice versa. However, the trend of Bitcoin has been upward for 10 years.
Because of this, the recommendation of all experienced investors is to treat Bitcoin as if it were a game of chance, that is, not to invest money that you could not afford to lose.
If you have this in mind, you should avoid the most common problems in this market.
So much potential
Such a volatile market does not usually attract many people, so it is worth asking yourself: what is special about Bitcoin? Why do people keep betting on him despite the risks?
Very simple: the potential it has. For now, the maximum this coin has reached is approximately USD 60,000. However, some experts say that it could exceed the barrier of USD 100,000 in the coming years.
We are talking about double the value of the currency, which is almost impossible to see in another more traditional kind of market, such as stocks on the stock market.
The best thing about this kind of product is that you only have to make one or more deposits, and voila, the program takes care of investing it as best it can. Remember to check how it goes every day!
A lot of information
When all this “boom” of the cryptocurrency market began, the amount of information about it was very limited, which is why not many people took full advantage of the rise in prices.
This has changed, and today it is very easy to find hundreds of articles and guides on Bitcoin and other cryptocurrencies and related products.
Therefore, it is very easy to become an expert on the subject if you desire to study a little. Although this will also depend on the experience, you have to invest.
We recommend that you read some of the guides that start from the basic concepts before entering fully with the more complex topics to avoid feeling overwhelmed.
Increasing acceptance as a payment method
There are hundreds of stores that accept payments with Bitcoins. Thanks to the fact that more and more e-commerce heavyweights are jumping on the bandwagon, it is possible to buy virtually any physical item using Bitcoins.
So if you are serious about reducing your exposure to fiat currencies, the increasing general acceptance of Bitcoin is likely to be a big help.
Simpler international transactions than with normal currencies
Transactions in Bitcoins that cross international borders do not differ from those carried out within the same country.
Therefore, there are no limits or fees for international transfers, such as credit card payments, cash withdrawals using ATMs, and international bank transfers.
ATM fees and credit card payments abroad can amount to up to 3% of the value of a transaction, and sometimes more.
On the other hand, the commissions of money transfers can reach 15%.
So if you are evaluating the use of Bitcoin, its advantages and disadvantages, this can be a good incentive.
Although most of the rest of the cryptocurrencies lack limits in terms of this type of movement, international transactions using Bitcoin are easier because this cryptocurrency is more popular around the world.
Typically lower transaction fees
Compared to other digital payment methods (such as credit cards and PayPal), Bitcoin has lower fees.
Although these commissions are variable, a transaction in Bitcoins rarely costs more than 1% of its value.
By comparison, most other digital payments carry fees of between 2% and 3%.
Anonymity and privacy to traditional currencies
Depositing euros or other fiat currencies into an online bank account or making transactions by credit card and PayPal does not protect your privacy any more than using cash or a credit card at a store counter.
Although your online accounts are likely protected against all attacks (except the most sophisticated ones), they are associated with you.
Therefore, private sellers and public authorities will be able to keep track of your electronic funds movements.
In comparison, the privacy protections that Bitcoin incorporates allow users to separate their Bitcoins accounts from their identities completely, should they prefer to do so.
And although it is possible to trace Bitcoins flows between users, it is very difficult to find out who those users are.
So if you are researching Bitcoin, its advantages and disadvantages, this is undoubtedly an important point in its favor.
Independence of creators and political agents
Bitcoin is not created or controlled by any state entity (such as a central bank); it is not subject to political influence.
And since it exists outside of any political system, it is also much more difficult for governments to block amounts of Bitcoins, either as part of legitimate criminal investigations or as punishment for political acts, as is often the case in repressive states like Russia and China.
Due to its completely decentralized nature, popularity and liquidity, Bitcoin is also not influenced by its creators.
Many less popular cryptocurrencies are characterized by being concentrated in a few hands. So a handful of accounts are spread over most of the existing units.
This allows the creators of these cryptocurrencies to manipulate the supply and, to some extent, the value relative to other cryptocurrencies, negatively affecting other people who have that same cryptocurrency.
The inherent scarcity of Bitcoin (there will only be 21 million) is likely to maintain its value in the long term against traditional currencies and over other cryptocurrencies that do not present this scarcity (such as Dogecoin, a popular alternative to Bitcoin).