How to Approach Bitcoin from an Investor's Standpoint?| MENAFN.COM

Wednesday, 06 July 2022 06:49 GMT

How to Approach Bitcoin from an Investor's Standpoint?


(MENAFN- CCP Marketing)

Cryptocurrencies have gained immense prominence as safe havens for investors. The primary reason is that they aren't subject to inflationary risks like fiat money. However, Bitcoin is the crypto industry's reserve currency that investors use to gauge the market. Many investors usually start with Bitcoin before moving on to other cryptocurrencies. That is why Bitcoin currently accounts for almost half of the total crypto market capitalization. 

Bitcoin is a decentralized digital currency, facilitating seamless and low-cost payments worldwide. Anyone with a smartphone and internet access can join the network to send and receive money in Bitcoin. However, Bitcoin has unique benefits and risks that investors should understand before putting their money on it. Here's what every investor should know about Bitcoin investments.

Bitcoin is a Virtual Investment 

Unlike fiat money or tangible assets, Bitcoin is a virtual investment that users can only access online. It is an asset that you can neither touch nor feel but holds significant value. Bitcoin's value mainly relies on the public confidence in using it, as often portrayed by the media. Bitcoin's underlying blockchain technology validates all transactional records on a shared digital ledger, allowing investors to track their investments conveniently. 

Supply and Demand 

Similar to other commodities, Bitcoin's price mainly depends on its supply and demand. However, Bitcoin's decentralization means no central authority or government regulates its supply. Instead, Bitcoin has a finite supply of 21 million tokens only, meaning that is the amount that will ever come into circulation. More than 18.5 million tokens are already circulating in the market. 

Bitcoin's algorithm regulates the pace of minting new tokens. Besides, Bitcoin also undergoes halving, a process that reduces the number of rewards issued to miners by half every four years. Bitcoin's capped supply and halving induce scarcity, allowing its price to grow steadily over time. That creates opportunities for profitability since investors can leverage the projected price movements to increase their profits. 

The demand for cryptocurrencies is rapidly growing, and Bitcoin is one of the most sought-after cryptos by individual investors and corporations. Bitcoin's increasing mainstream adoption and limited supply would impact significant growth in its value, making it very expensive in the future. That means those who invest in Bitcoin now could make huge profits from its future growth prospects. Consequently, prospective investors would incur considerable costs to acquire Bitcoin. 

Bitcoin's Volatility 

Bitcoin is a highly volatile asset, with sharp and rapid price movements. Bitcoin's price could move up and down in minutes, based on the public's perception. However, its volatility also creates multiple opportunities for traders and investors to make profits in the short and long term. Proper market timing is critical to success. 

Today, crypto exchanges platforms such as bitlq.net, offer up-to-date market statistics, including Bitcoin price movements, to enable traders and investors to know the best times to enter and exit their positions for profitability. However, it's also crucial to stay abreast of the broader crypto market events and news. Investors should also invest cautiously, cutting their losses in case of widespread market fluctuations. 

Investing in Bitcoin 

Bitcoin offers robust benefits to its users, facilitating faster, secure, and low-cost money transfers. It is a store of value that you can also use to pay for goods and services from merchants worldwide. However, the decision to invest in Bitcoin or not should mainly depend on your investment goals and financial needs.  

The above article has discussed some of the key opportunities and risks of Bitcoin investments that every investor should consider. However, conduct additional research from crypto investors and investment experts to determine whether Bitcoin is the best avenue for you. Nevertheless, Bitcoin is a secure and profitable investment with significant growth prospects. 

 

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