First of all, in order to invest in cryptocurrency, and especially in Bitcoin, you need to know what is it.
Cryptography is a decentralized system, based on advanced mathematical methods of protection algorithms. The first attempts to launch cryptocurrencies were in the 90s, but they were unsuccessful. A new round of attention began in 2009, when Bitcoin was mined.
Advantages of this system
- Money transfer operations are not controlled
- High degree of protection
- Limited Emission (21 million Bitcoin)
Bitcoin emission was limited by its creator Satoshi Nakamoto. According to experts, Bitcoin will be fully mined in 2140. This year, 21 million Bitcoins will be mined.
Disadvantages of this system
- Legally not regulated.
- Irreversibility of operations. If you make a mistake when transferring funds, it will be impossible to cancel the operation.
- The insecurity of cryptocurrency, only the interest of users.
Opportunities and risks of investing in Bitcoin
The opinions of experts diverge dramatically. Some advice you to stay away from cryptocurrency, while others believe that they expect rapid growth in the future, as it was several years ago. But all this is just an opinion and predictions. But in some ways their opinions coincide. If you decide to make money and withdraw money quickly, then you should wait until the market goes up rapidly, but if your goal is a long-term investment, then you can buy Bitcoin now.
The growth of cryptocurrency is influenced by legalization and social interest in society, besides the emission of some cryptocurrencies is limited, which also affects their growth. The period of decline or the growth of Bitcoin can take months or years. Panic on cryptobirges leads to great losses for some, and to fabulous profits for others.
Cryptocurrency can be considered as an investment tool. The most profitable strategy is Buy and hold. This is talking about long-term investments, because in the short term, the market is subject to strong fluctuations. Proof of this is that in 2009-2013 it rose to $ 1,200, and by January 2015 it fell to $ 160, and by January 2017 it rose again to $ 1,200. And by January 2018 had fallen off to $ 756. Only a few large deals can lower or raise the rate.
The conclusion from all of the above is: if you are not a specialist in this field, then you have no more chances to increase funds on the stock exchange than in a roulette or casino.
However, you can invest in the long term, which significantly reduces the risk of losing your investment.
Bitcoin is a risk in which you can’t invest more than you can afford to lose.