Month: December 2020

Potential to become irrelevant

Perhaps the biggest downside towards Bitcoin is the real risk of it becoming irrelevant. The primary reason why Bitcoin has demand is because it offers many of the advantages that traditional currencies cannot offer but if another cryptocurrency was to offer the same or better, we could see a...
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High price fluctuations

When seen as a speculative asset, short-term price fluctuations may not look too bothersome but when looked at through the lens of a currency, it becomes apparent why it’s such a major issue. Imagine saving $7000 in bitcoin only to be unable to buy something when you urgently require...
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Security issues

While a lack of regulatory compliance or legal oversight grants the currency more flexibility, it also makes it both more susceptible to scams and frauds and less likely that such activities could be prosecuted by law enforcement agencies. Even worse is that for victims of transaction fraud, there are...
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Transactional freedom

Bitcoin transactions don’t carry with them the same level of fees and legal hurdles that encumber traditional currencies. International Bitcoin transactions are no different than local ones and fees charged tend to be generally far lower than other modes of digital payments such as credit card and PayPal. Furthermore,...
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Increasing liquidity

Over the years, Bitcoin has been becoming an increasingly liquefiable asset with it becoming easier and more accessible to convert its value in traditional fiat currencies. Other cryptocurrencies and digital assets still are struggling to gain acceptance and many of them cannot be exchanged with real-world money without them losing a...
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A potentially lucrative money maker

Where some people only see chaos, others see opportunity. While the high volatility in Bitcoin value puts off some traders from investing their money in it, others see it as an easy and quick way to earn a hefty income – buying when the prices are down and selling...
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Finite supply

Bitcoin’s own source code limits the number of new Bitcoins that can ever be created to exactly 21 million units. Each new coin created slows down the creation process with the rate, on average, halving every four years. This sets it apart from traditional currencies which can theoretically have...
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Following the herd

Another common mistake made by new traders is that they blindly follow the herd; as such, they may either end up paying too much or FOMOing into a hot coin. Experienced traders are accustomed to exiting trades when they get too crowded. New traders, however, may stay in a...
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Acting on trading patterns and indicators that are not clearly understood

Beginning traders are terrible at technical analysis. They often identify patterns on a chart that are not there or are incorrect based on context and chart placement. Beginning traders should develop a very simple system for trading and avoid making decisions on patterns or indicators that they do not...
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Using leverage

Don’t do it!!! According to a well-known investment cliché, leverage is a double-edged sword because it can boost returns for profitable trades and exacerbate losses on losing trades. Leverage should only be used by advanced traders who have been profitable consistently for years. There is no surer way to lose money...
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