The Pros and Cons of Trading Bitcoin

Bitcoin was launched in 2009 as the first digital currency to have ever existed and it has since gained authority in the crypto world and finance sector. There's a lot of hype today about bitcoin and the demand keeps increasing daily but is it worth the hype? Let's explore some of the pros and cons of trading bitcoin today.

PROS

1. Decentralization

The decentralization of the bitcoin currency makes it more admirable to many people since it makes you completely in charge of your money. Bitcoin is not regulated by any bank or third-party institution, which makes transactions easier and faster compared to traditional banks. The transaction fees are also significantly lower.

2. Finite Supply

There is a finite supply of bitcoin capped at 21 million and to make the most of this, the rate at which bitcoin is produced is reduced over time. This is done through a process known as Bitcoin Halving where bitcoin miners get to receive 50% less bitcoin for every transaction they verify. This process occurs every four years and the last time it happened was in May 2020 when it became 6.25 Bitcoins per block.

This system is designed to continue until the year 2140. The benefit of this halving is that it reduces the rate at which new coins are created and lowers the available supply. Increased demands and decreased supply of bitcoin are huge factors that when combined increase the value and price of bitcoin.

3. High-Tech Exchanges

There has been a drastic change in how we trade bitcoin over the years, as technology continues to advance and more high-tech exchanges are created. You can try the bitcoin circuit trading robot and other advanced exchanges used globally today. These exchanges are designed to simplify bitcoin trading for the average person, whether they are a beginner or an expert.

CONS

1. Security

There is an alarming rate of bitcoin fraudulent activities, which is bad considering that it's a decentralized currency and wrong transactions cannot be reversed. While decentralization has its benefits, this is the downside to it. If you lose your money for any reason, you will never be able to get it back unless you know the owner of the account it was transferred to. This is why it is often encouraged to take extra security steps and use bitcoin platforms with tight security in place.

2. Highly Volatile

Bitcoin is a highly volatile asset, which means the price could increase or decrease at any time. While several factors may drive the price movement, you almost can never predict when the price will be favorable to you. This means you are likely to lose your money if the value decreases. Hence, finance experts would often advise not to trade or invest any amount you can't possibly let go of. This is not where to keep your savings.

Conclusion

Bitcoin is still thriving today, as the advantages seem to outweigh the disadvantages. It is however important to tread with caution while trading and ensure you do adequate research to be familiar with how it works before going fully into it.