The digital money, Bitcoin, was created with the idea that anyone with an internet connection, living anywhere in the world, can do transactions with any person across the globe 24×7. This was possible due to the basic principle on which the cryptocurrency is based. Decentralization enables you to trade without any central authority involved.
This being a new concept was accepted with a great deal of scepticism. However, in the last few years, Bitcoin has been embraced by the people and the governments. The institutional investors who stayed wary of Bitcoin trading are gradually shifting their stance, businesses and banks are joining in, and the youth worldwide are drawn to it and see it as a currency of the future.
With Bitcoins being gradually incorporated into the global economic mainstream, the prospects of Bitcoin trading and investment in the future are promising. Now is as good a time to join the Bitcoin trading arena.
Cons of Bitcoin trading according to its opponents
Bitcoin is not yet taken seriously by many noted luminaries in business and finance, say the Bitcoin opponents. This, according to them, is reason enough to be sceptical of this digital currency. World’s most prominent entrepreneurs Warren Buffet to noted economist Nouriel Roubini has spurned the concept of Bitcoin.
Mr Buffet has called it a mirage and believes that cryptocurrency can never meet the test of a currency and hence has no value.
For the non-believers, Bitcoin cannot be deemed as serious currency because:
Extreme volatility and unpredictability of Bitcoin
Bitcoin is a highly volatile commodity. Due to this, the frequent and erratic swings in its price can never be correctly predicted; even if one tries to analyze its fluctuations, it is almost impossible to find a pattern to predict its price in the future.
Bitcoin market dominated by whales
A whale is a term used in cryptocurrency for individuals or entities who own a large share of Bitcoins. They can hugely influence the crypto market. If a whale decides not to move its assets for a long time, it lowers liquidity, thus increasing price fluctuations. Similarly, if he moves a large share of his assets all at once, this again increases volatility.
Upheaval in Bitcoin prices by as random factors as tweets on social media
The one tweet in Bitcoin history that caused massive upheavals and resulted in its crash was the Elon Musk tweet in May 2021. When he tweeted in support of Dogecoin, Bitcoin crashed by more than 8% and plunged below $43,000. Another tweet reassuring investors that Tesla had not sold any bitcoin resulted in its value surging over $44,000.
Despite the criticism and opposition to Bitcoin, its existence and its gradual recognition as a legitimate currency can in no way be overlooked. It has fought against odds and has made its presence felt in the current global economy. In 2021, the government of China imposed a ban on Bitcoin.
Despite initially imposing a ban on cryptocurrency, China is now embracing the concept of cryptocurrency. The aftermath of this announcement was a plunge in Bitcoin price by $2000. But it survived the ban and is still going strong. With a market cap of $1 trillion, it is obvious that Bitcoin is not just a fad. It is a currency that is here to stay.
Reasons that support that it is not too late to trade in Bitcoin
- With the limited supply of only 21 million Bitcoins, it is viewed as a dependable store of value like gold and will continue to remain so. It is referred to as liquid gold as it can be transferred easily.
- Major financial institutions are incorporating it in their transactions.
- Currently, only 4% of the world population has invested in Bitcoin. There’s immense scope for others, including you,u to join in through crypto exchanges or reliable trading apps like crypto superstar.
- Anticipation among Bitcoin investors of an all-time high in price makes it an exciting phase for new investors to start trading.
The above points only reiterate that there may be scepticism about the survival of Bitcoin and its use as a digital asset, but it is slowly being accepted by investors and institutions alike.