Whenever there is uncertainty in the economy, people look for ways to protect their assets. Investing is usually the best way to do this as putting your money under your mattress is not the best idea.
With the advent of cryptocurrency a decade ago, investing in it has become an option that is worth investigating. It seems to be disconnected enough from the same forces that cause those booms and busts of the global economy. At least in theory.
It often pays to think of the pros and cons with a certain type of investing so the same holds true for investing and trading in cryptocurrency. If you’re looking at how to buy Bitcoin with cash to protect your assets then you need to understand both sides of the coin.
In this article, I will go over the pros and cons of bitcoin trading so you can decide for yourself if it is your best option.
Let’s start with the good aspects that you can expect when you are investing and trading cryptocurrency.
If there is one thing that is for certain no matter what the economy is like at the moment, it’s that there inevitably will be inflation at some point in the future. Your cash is going to be worthless ten years from now since it is easy for a central authority like a federal reserve to print more money.
Since cryptocurrencies are finite, in the sense that there is no way to create more, they are recession-proof. Values can fluctuate and they could be worth less than what you paid to buy in, but they won’t be worthless just as a matter of depreciating.
This gives you some stability and can provide a tidy profit if the market works in your favor and the value increases. Fiat money can not increase in value.
Since there is no central authority or middleman involved in your investing, you can do whatever you like with the currency. If you are looking to do some trading with somebody that lives in another country, there is no barrier to doing so as there is no need to convert the currency. A Bitcoin in one country is worth the same as another.
And because of the lack of a middleman, you are not paying conversion fees or any other exorbitant fee. All you pay is the cost of the transaction as it costs coins to make transactions on the blockchain.
There are disadvantages, of course, so let’s go over those.
This is a double edge sword as the fluctuations in the market have turned early investors in bitcoin into millionaires almost overnight.
The downside to this is there were more people that lost considerable amounts of money during the crash that took place in early 2018.
If you are trying to do short term trading, then this may not be too bad, but if you are looking for long term possibilities then this may not be your best option.
May get banned
Many countries are not enthused about the idea of a competing currency with no oversight attached to it. There are still countries like Pakistan and others that have decided that they won’t allow for cryptocurrency trading and this could affect more countries in the future.
- This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.