Warning: Undefined variable $plugin in /homepages/19/d880902783/htdocs/wp-content/plugins/cryptocurrency-donation-box/includes/Api.php on line 175
Cryptocurrencies like Bitcoin are a natural store of value. The crypto market offers good opportunities on return similar to the share market. One can however invest an insignificant amount of money in order to reap the benefits of a growing market.
With the emergence of new trading platforms, interested traders can now experience the world of crypto with ease. New and advanced trading platforms like Coinbase come with a user-friendly interface that helps traders to invest in the market with ease.
This application has a considerably low minimum investment limit so that people from all classes can trade in cryptocurrency.
Pros and Cons of Crypto Trading
So find out how crypto trading can help the lower middle class to get a return on their investments, shall we?
Bitcoins are not regulated by the government. I know, this might depend on where you live. As mentioned, the legal tender is issued and controlled by the Government of a particular country.
The Government can print money when there’s a deficit in the total currency that is in circulation. This usually happens when financial institutions who are in charge of the currency circulation can’t recover from losses.
However this process is also inflationary. This is just one example to show how legal tender is directly affected by the economical situation of a country. The value of legal tender may rise and fall depending on the growth rate of the economy.
The Bitcoin value is not affected by the economical conditions of any country. It is completely dependent on its own circulation.
Which is why any economic instability won’t affect the value of Bitcoin. And most importantly, there is a limitation on the maximum number of tokens that can be in circulation in its lifetime.
This means the total number of the coin will never increase after it has reached its maximum limit.
Like gold and other asset class commodities, their prices are usually very high because of their scarcity.
The laws of demand state that for any commodity which is supply that is lower than its demand, its value will increase.
Bitcoins, gold, silver, and other precious metals fall into this category of commodities with limited supply.
The price of the Bitcoin is affected by various factors.
One of the most important factors is the proportion in which it is being circulated.
With banks and financial organizations like JP Morgan or PayPal investing in them, and several Multinational corporations investing in them for faster and more efficient transactions, the total transaction increases, which also increases the value of Bitcoin.
Bitcoin is generated through a process known as mining.
Bitcoin relies on a public ledger system, where the transaction is audited and registered simultaneously by all the nodes within the Bitcoin network.
The nodes generate the hash required to create new blocks of transaction records. The new blocks are placed in a contiguous relationship to the existing blockchain. As more transactions take place, more blocks are added to the chain.
With the addition of more blocks, the scalability becomes difficult. Mining becomes harder.
It is also for this reason the value of Bitcoin increases. The number of coins produced against the mining of each new block also decreases, which increases the demand and the value of Bitcoin.
While there are a few disadvantages of trading in Bitcoin or any other cryptocurrencies. The crypto market is highly speculative. It is almost impossible to make accurate predictions of market trends.
While we are aware of the Bitcoin rags-to-riches stories, we must also remember that a lot of new investors have lost money when the value of the currency plummeted. The value of Bitcoin fell after its famous bull run in 2017.
In 2021, with the announcement of Tesla CEO Elon Musk that they have invested in Bitcoin and would accept Bitcoin payments. The price of Bitcoin rose from 25000 USD to 64,000 USD in a short span.
However, soon after the company sold its assets and Musk publicly claimed that Bitcoin mining has an adverse environmental impact. This affected the market trends, and soon the value of Bitcoin fell again.
This proves how unreliable the market trends of Bitcoin or any other cryptocurrencies are.
You might argue that Bitcoins have the potential to give individuals all around the world investing possibilities. But: It doesn’t matter if you aren’t part of society’s upper class. If you have a little extra cash on hand, you can use crypto to make some decent money. All you have to do now is educate yourself on the finer points of Bitcoin/crypto trading, just like you do now. ☺
Donate Bitcoin to this address
Scan the QR code or copy the address below into your wallet to send some Bitcoin
Donate Ethereum to this address
Scan the QR code or copy the address below into your wallet to send some Ethereum
Donate Dogecoin to this address
Scan the QR code or copy the address below into your wallet to send some Dogecoin