The growth of the Internet and the proliferation of digital transactions have overcome many limitations on traditional currency exchange systems, which are usually burdened with high costs and long time processes. The first crypto currency, Bitcoin, was launched to tackle the problem. Bitcoin is realized to be the ideal currency that can provide anonymity, protection from inflation, as well as security from theft and fraud. More than just a means of payment, Bitcoin also can be adopted as one of the trading instruments with super high return potential.
However, for something horrendous to the virtual world and a trending topic, there are still many pros cons to cover Bitcoin trading. One side agrees with all the benefits provided by Bitcoin, but the other party is still worried about the risks that always membelenggunya. In this article, we will discuss some examples of pro counter trading Bitcoin.
Pro In Bitcoin Trading
- Bitcoin Build a Good Track Record
Bitcoin has managed to overcome many obstacles in its short history. Bitcoin can withstand all negative sentiments for nearly a decade in a difficult financial environment. This shows its strength to survive in the midst of competition with other instruments such as Gold, Silver, as well as conventional currencies like the US Dollar.
Bitcoin is now often used as a method of payment. More and more vendors and stores are now accepting payments through Bitcoin. Various ways including locking the value at the time of transaction so that volatility has no effect on the calculation of profit and loss traders, already offered by various e-commerce features such as BitPay and so forth.
2 Bitcoin Offers Hedging And Diversification
Are you worried about government debt or quantitative easing of the central bank? Bitcoin and the crypto currency market can offer ways to minimize the risk effects of these things, and protect the portfolio of diversified traders in various types of crypto.
Hedging is a way to reduce the risk of economic turmoil, which usually negatively impacts other assets. You can hedge by investing in crypto currency. You can also take advantage of crypto trading services at forex brokers, which offer one of the most powerful ways to use Bitcoin without the need to buy assets directly.
3 Bitcoin Starts Used In Everyday Life
Once accepted as a method of payment and store of value, Bitcoin is used more widely in the various joints of life, ranging from inter-state goods and services, donations to global charities, as well as tradable trading assets to profit from fluctuations in value. Media reviews of Bitcoin are also increasingly mainstream, along with price growth and public interest in the crypto currency.
4 Bitcoin Can Solve Various Problems
High inflation: when high inflation occurs quickly, Bitcoin and crypto currencies can be a good alternative to store value because they are not affected by inflation.
Capital control: some countries limit the movement of capital that occurs within its territory. Bitcoin will not be affected by this limitation because it is decentralized; the government will never be able to intervene in independent currencies like Bitcoin.
Asset seizure: the government may remove ownership of many assets, but will not be able to confiscate your Bitcoin assets, as they have no authority and access to browse the owner of any Bitcoin (anonymity nature).
High costs: bank transfer fees can sometimes be a burden in large number of transaction activities. Bitcoin seems to challenge the cost structure by offering low cost transfers.
5 Much Momentum Can Be Utilized
In the crypto currency market that has high volatility, there is always momentum that can be utilized to benefit from the big difference in movement. Moreover, the momentum that occurs has a high intensity, because the movement of Bitcoin price per day is always within the range of 5% -30%.
Cons In Bitcoin Trading
1 Record Traces That Are Still Short
Technical analysis on any Price Chart consists of three main components, namely:
Trends and Momentum: shows the direction of movement and price strength.
Support and Resistance: indicates a potential price reversal point.
Price Action and Chart Pattern: provide information about market psychology.
Compared to long-established trading assets, Bitcoin is new in corn and does not have much of a history of movement. Thus, the information can be analyzed on the chart was quite limited. Even Price Action Bitcoin that has been recorded since 2010, still nothing compared to the price action in the stock market, currency, and commodities.
2 Trading Dangers Blindly
New traders will be attracted by the impressive Bitcoin price increase. They usually believe that trading is just a matter of buying and making a profit. Unfortunately, the trend does not last forever. When the trend stops, the novice trader can not see the difference. They will continue to trade in the same way and wonder why their trade does not win anymore.
This is a very worrying thing in the crypto world. Great potential benefits easily attract newcomers who often like to ignore the risks and measurable steps in doing the analysis. Therefore, there needs to be a structured educational movement to prevent the risk of trading Bitcoin blindly, as well as anticipating the stupid actions of novices who are gullible in fraudulent schemes on behalf of Bitcoin.
3 Price Volatility
Volatility is good for trading as price movements rise and fall offers great opportunities for traders. Not much can be done if prices move flat for a week, a month, or even a year. But if too much volatility, the impact will also be negative. Market conditions with high volatility are actually less than ideal for traders, because it creates a high degree of uncertainty. It also gives less time to traders to react. If the participant is an experienced trader, then it will not matter. However, if a beginner trader tries to trade with high volatility, then it is likely he will quickly suffer huge losses.
4 Non-Permanent Market Sentiment
Uptrend Bitcoin and other crypto currencies (Altcoins) in 2017 are so strong, to imagine that the increase will never stop. Still, market sentiment may change. Along with the many restrictive measures by governments of various countries, financial institutions, and regulatory agencies in early 2018, Bitcoin's price dropped by more than 70% in just a short time. Clearly, positive market sentiment has turned negative. In fact, Bitcoin previously scored a record high at $ 19,699 by the end of 2017.
5 Conflict With the Central Bank
Bitcoin and other crypto currencies are not centralized and are not created by any central bank. If the coins become very popular as a means of transactions and storing wealth, then it can be more difficult for the central bank to consider the impact of its use on the condition of the economist
There are several risks that may occur from this, namely:
Create uncertainty and increase economic risk.
Since the crypto currency (to date) has a limited supply, it can increase deflationary trends or at least poor inflation. Deflation is not desirable in countries with high debt levels, as debt becomes more costly in real terms. Deflation can also affect the country's income, through sales taxes and lower wage taxes.
The popularity of the crypto currency can also undermine the demand for Fiat currencies such as the US Dollar, Euro, and Japanese Yen.
After knowing the pros counter Bitcoin trading, you can try Bitcoin trading solutions without risk that can be done through various methods of choice. More details can be listened in the article Cara Bitcoin Trading Without Capital.