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Pros and Cons of Investing in Bitcoin, Will It Be a Millionaire Maker?

Last Updated November 3rd 2020

Advantages and Disadvantages of Bitcoin Investing Explained

Pros and Cons of Investing in Bitcoin, Is it Good to Invest in Bitcoin?

Are you interested in investing in Bitcoin? Do you want to know all the pros and cons of investing in Bitcoin BTC the this legendary digital asset? Wondering if Bitcoin can be a millionaire maker? Then you’re in the right place!

Here is all you need to know about the advantages and disadvantages of investing in Bitcoin and its investment potential to be a million maker.

What Is Bitcoin?

Before we explore the pros and cons of investing in Bitcoin, we should answer the question “What is Bitcoin?”

Bitcoin is one of the most traded assets ever, an asset that was launched in 2009 by the mysterious figure Satoshi Nakamoto.

Bitcoin is both a payment platform and digital money, with Bitcoin’s blockchain and BTC being interconnected. 

To be more precise, Bitcoin is a digital platform that runs its own blockchain or blocks of transactions, allowing people to make payments in an easy and transparent way. Bitcoin is also a new type of money that aims to make our financial system decentralised and less burdensome by eliminating the need for central banks and costly third parties.

Because of its innovative nature, Bitcoin has become an attractive investment option for both part-time traders and crypto whales.

But is Bitcoin a good investment and can it be a millionaire maker? Let’s explore the pros and cons of Bitcoin investing!

The Pros of Investing in Bitcoin

pros of investing in bitcoin

 

What are the benefits of investing in Bitcoin? 

Investing in Bitcoin is a popular venture across the globe. Why? Simply because Bitcoin has numerous advantages over other investment options. 

Here are some of the pros of investing in Bitcoin:

✅ Bitcoin is poignant:

Bitcoin is the first coin ever, and as such, it has led to the creation of thousands of alternative coins, called altcoins. This fact makes Bitcoin a prestigious and desired asset; an asset that has revolutionised the way we see money.

✅ Bitcoin is decentralised:

One of the main advantages of Bitcoin is its decentralised nature; there are no authorities or central banks that may impose high fees or restrictions. Bitcoin is also global, so there are no exchange rates to deal with. This feature is highly tempting, with more and more people turning to cryptocurrency investment.

✅ Bitcoin is accessible:

To invest in Bitcoin you don’t need a fortune or credit history. This gives an alternative to people distrusting their government or living in restrictive places to access finances. And guess what! Cryptocurrency investing is open 24/7.

✅ Bitcoin is highly liquid:

One of the most tempting pros of investing in Bitcoin is its liquidity. Bitcoin is among the most liquid investment assets, so traders can either trade Bitcoin for other assets in the short-term or buy and hold Bitcoin for long periods. The great news is that many trading platforms like eToro accept Bitcoin, which facilitates Bitcoin investing across the globe.

✅ Bitcoin is transparent:

As stated above, Bitcoin is a decentralised platform; it’s the first implementation of peer-to-peer digital money that attracts people from all walks of life. On top of that, Bitcoin is a public ledger that allows everyone to see transactions as they are stored permanently on the blockchain.

✅ Portfolio diversification:

Looking for more pros of investing in Bitcoin? Well, Bitcoin investing offers people the opportunity to diversify their portfolios. Аs we know, portfolio diversification can help investors spread investments and reduce exposure risks.

✅ Hedge against inflation:

Because of its supply cap of 21 million coins and decentralised nature, many believe that Bitcoin is immune to economic turmoil, geopolitical problems, and inflation. Some claim that Bitcoin may outperform gold in the future.

✅ Bitcoin has valuable business features:

Bitcoin has various features, such as multi-signature authorisation, that can improve transparency and security in business settings. On top of that, according to data, Bitcoin is the most accepted coin among retailers - with more than 15,174 businesses that accept Bitcoin and 5,041 Bitcoin ATMs in existence. Isn’t that one of the most tempting pros of investing in Bitcoin?

✅ Return on Investment (ROI):

Though Bitcoin investing is not a risk free, figures show that Bitcoin has a significant ROI compared to other assets. In 2020, in particular, Bitcoin has outperformed assets, such as gold and oil.

Don't miss: What Top 10 Cryptocurrencies Will Explode In 2021?

 

The Cons of Investing in Bitcoin

cons of investing in bitcoin

Like any investment, putting your money into Bitcoin isn't risk-free. So here's what you should know about the risks of investing in Ripple.

Some of the cons of investing in Bitcoin include:

❌ Bitcoin is highly volatile:

One of the worst cons of investing in Bitcoin is its volatility. As Bitcoin is a scarce asset, its value is influenced tremendously by demand and supply principles and market sentiment. This makes Bitcoin highly unpredictable and volatile, hence risky. For instance, Bitcoin reached almost $20,000 in December 2017, and weeks later, it dropped below $10,000.

❌ Bitcoin transactions are quite slow:

While Bitcoin facilitates payments across the globe, many users disapprove of its slow processing times. It’s not a secret that any Bitcoin transaction can take up to 10 minutes. Besides, fees may vary depending on mining decisions and transaction size in bytes.

❌ Bitcoin has limited use:

Though the number of merchants accepting Bitcoin is increasing, and more and more people are turning to the lightning network to make micropayment, Bitcoin has still limited use and depends on Internet availability. It's a major con, isn’t it? On top of that, compared to other coins like Ethereum, Bitcoin is limited only to financial transactions.

❌ Bitcoin is not 100% safe:

Even though blockchain technology is almost unhackable, the truth is that Bitcoin is not 100% safe. Hacking is a major threat, especially if you hold your bitcoins on an exchange. We all remember the notorious Mt.Gox hack, right? Furthermore, many people find it difficult to manage private keys and may lose their wallets beyond recovery.

❌ Bitcoin investing is not regulated:

One of the biggest disadvantages of investing in Bitcoin is the fact that there is little regulatory oversight. Crypto regulations and taxation vary across the globe and are often unclear or controversial. Unfortunately, a lack of regulations can lead to fraud and scams.

❌ Bitcoin is misunderstood:

Despite its pros and innovative technology, investing in Bitcoin is still veiled in misconception. Many associate cryptos with the Silk Road, illicit activities, and crypto scams, which makes cryptocurrency adoption difficult. Besides, going against traditional payment systems is still unorthodox for many people.

❌ Bitcoin is not energy-efficient:

One of the worst aspects of Bitcoin is its power consumption. According to BBC, Bitcoin uses as much power as Switzerland or more than seven gigawatts (GW).

So is Bitcoin a Good Investment?

As we can see, investing in Bitcoin comes with different pros and cons. Though you should decide for yourself whether Bitcoin is a good investment or not, it’s noteworthy that many investors believe in the bright future of Bitcoin and claim that it might outperform gold.

With a 24-hour trading volume of $37,064,929,264 and a market cap of $254,620,631,806, as per CoinMarketCap, Bitcoin is the top traded cryptocurrency across the globe.

bitcoin price chart

Bitcoin has also managed to survive the bear market triggered by the ongoing coronavirus pandemic.

Would you consider investing in BTC?

Should You Invest in Bitcoin?

To decide if investing in Bitcoin is a good option for you, first you should calculate the risk-reward ratio and decide for yourself if potential rewards outweigh possible risks.

True, Bitcoin is a risky investment and the technology behind it is still evolving... But Bitcoin is also one of the most popular and valued coins that gives investors the chance to diversify their portfolio and potentially make a profit.

In the end, it’s all up to your investment goals and willingness to learn and stay up-to-date with the crypto market.

The real Bitcoin investing question then, does it really work? If you’re willing to invest the time and energy, then for you, it could well do.

How Much to Invest in Bitcoin?

If you are willing to invest in Bitcoin, then you may ask another important question: “How much to invest in Bitcoin?”

While it’s up to you, your funds, and your comfort zone, you should never invest more than you can afford to lose.

Never risk more than 1% of your account on a single trade and invest in an efficient risk management strategy.

If you really want to invest in Bitcoin, you can do that with small BTC increments till you acquire more experience and confidence. The good news is that you can start trading Bitcoin and other cryptos with as little as $100.

Will Bitcoin Be a Millionaire Maker?

In a sense, it already is – BTC has a market cap of $281.1 billion at the time of writing and, as we have discussed, the price might continues to rise due to the reasons explained above.

Bitcoin is influenced by supply and demand principles, which makes it highly volatile. Experts believe that once BTC reaches its max supply of 21 million coins, it will become more stable…

The value of Bitcoin BTC is likely to increase further, as scarcity tends to promote growth in its price. Please remember, Bitcoin or any investment includes some risk. So only invest what you can afford and do as much research as possible before making a final decision on Investing in BTC.

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Key Points

  • Investing in Bitcoin has numerous pros and cons.
  • Bitcoin is the oldest and most traded crypto that is highly liquid, transparent, and relatively safe.
  • At the same time, investing in Bitcoin is volatile, energy inefficient, and lacks proper regulatory oversight.
  • From short- to long-term investment, investing in Bitcoin can be risky but at the same time profitable.
  • Many Bitcoin investors believe in its bright future and potential growth.
  • Before investing in Bitcoin, one should invest in trading education, risk management, and self-discipline. We at Trading Education provide different educational materials that can help you master the art of crypto trading.

Now you know the pros and cons of investing in Bitcoin, so you can decide for yourself if Bitcoin is a good investment that can be a millionaire maker. 

If you want to invest in Bitcoin, simply sign up with eToro. This top exchange allows you to buy and sell cryptos and trade CFDs of over 90 crypto pairs.

If you liked our article Pros and Cons of Investing in Bitcoin, Will It Be a Millionaire Maker? Advantages and Disadvantages of Bitcoin Investing Explained, please like and share it with anyone who might be interested too.

Further Reading:

Bitcoin Price Prediction Forecast: How Much Will Bitcoin Be Worth In 2021 And Beyond?

Cryptocurrency Investing Tips And Mistakes To Avoid

Top 10 Most Important Cryptocurrencies Other Than Bitcoin

Most Popular Cryptocurrencies In The UK

10 Cryptocurrencies to Consider In 2021

Most Popular Cryptocurrencies In The USA

FAQs

Is it worth it to invest in Bitcoin?

Yes, it is worth investing in Bitcoin. Given the fact that Bitcoin is a hedge against inflation and may outperform gold, there’s no doubt that Bitcoin investing is worth considering.

Is it smart to invest in Bitcoin?

Bitcoin is one of the most traded assets, often considered a safe haven in times of social turmoil. For instance, Bitcoin has managed to survive the bear market during the ongoing pandemic, which means that investing in Bitcoin is definitely smart.

Is Bitcoin a good investment?

Yes, Bitcoin is a good investment for traders who are willing to embrace its risks as well as for crypto enthusiasts who believe in the decentralised future of the world of finance.

Is Bitcoin a high-risk investment?

Yes, investing in Bitcoin is risky due to its high volatility. At the same time, this high-risk investment is associated with potentially high returns. Thus, always do your research, fully understand risk management, and self-control to reduce risks and stay ahead of the crypto game.

Should I invest now in Bitcoin?

If you are willing to invest in Bitcoin, now it’s a great time to dive into the world of cryptocurrency. In fact, many financial experts believe in Bitcoin and its growth far beyond 2021.

Can you get scammed through Bitcoin?

Though Bitcoin has many advantages over other cryptos, Bitcoin is often referred to as the Pandora’s Box of crypto investing. Many scams have involved fake Bitcoin exchanges and Initial Coin Offering (ICO) scams. Moreover, people still associate Bitocin with the Silk Road and illicit actions. Thus, always be aware of possible risks and fraudulent activities.

How many Bitcoin millionaires are there?

There are more than 17,971 Bitcoin millionaires or addresses with more than $1 million in Bitcoin, according to recent data. From day trading to hodling and mining, traders can explore different Bitcoin investment options that can help them increase their wealth over time.

Where to invest in Bitcoin?

One of the best places to invest in Bitcoin is eToro. It provides great trading tools and allows crypto enthusiasts to buy and sell digital coins and trade CFDs of over 90 pairs and assets. You can easily open an account today.

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