So should you or should you not invest in Bitcoin?
Bitcoin and other cryptocurrencies are gaining popularity in the financial markets despite the controversy of their value. Should you invest or should you not? As a part of the investment strategies, diversification is the way to go, never ever put all your eggs in one basket. Cryptocurrency is one of the products that caught investors’ attention since its growth in 2011, you can refer to the growth of Bitcoin here. Bitcoin led the growth of the term cryptocurrency after its birth in 2009 helmed by the mysterious persona, Satoshi Nakamoto, where it is believed to remove restrictions of central authorities on the medium of exchange. Despite the freedom the medium has, Bitcoin and all other cryptocurrencies are susceptible to highs and lows similar to stocks.
What are Whales?
In the crypto world, we refer to those who have the ability to move markets as whales, you can refer to the explanation of whales here. Whales’ movements can be tracked by noticing the big volumes of tokens movement through the blockchain, while the most popular is Etherscan for Ethereum. Aside from whales, celebrities CEO such as Elon Musk recently “controlled” the market using his tweets on Twitter by claiming it is not green enough.
He also indicated a “break up” with Bitcoin meme on his other tweet, see below, which sent Bitcoin prices down.
However, the latest was that SpaceX was holding Bitcoin, read this. Below is a chart is taken from Vox.com that indicates how Elon Musk influences the market of Bitcoin in 2021, which indicates the call for regulations in many countries. This financial product was made to provide power to the people in fair exchange, but on the other hand, gives the opportunities to allow abuse.
With big corporations such as Tesla holding Bitcoins, we would read that Bitcoin does have a future as a financial product that is worth considering as a diversified product in your investment strategy. Some other public companies that hold Bitcoin are Microstrategy and Square.
But is Bitcoin safe?
Unlike traditional financial products such as stocks, bonds, commodities, cryptocurrencies are susceptible to many issues such as scams and hacks.
Scams can come in all forms, it can be from a company cold calling, through an email or a message to your mobile, or it can be from the same community group introducing you to new opportunities.
Recently, ABCC Exchange was hit by a scammer posing as one of our community ambassadors soliciting personal details of traders. The team had to inform and educate users not to fall prey to these impersonations through its social media. For more instructions, read here.
Aside from close one on one conversations phishing scams, there had been an increase in investment-related scams relating to cryptocurrency. In Australia, 53.4% increase in scams reported by the Australian Competition and Consumer Commission, as reported by Cointelegraph.
Be watchful of who you can trust when it comes to your money, always ask for details and evidence before taking that leap. In other words, control the greed in you and make the best decision. Before you decide to invest in Bitcoin or any cryptocurrencies, you should also understand the basics of cryptocurrency processes such as digital wallets, trading, and gas fees. The right cold and/or hot wallet should give you the confidence to store and keep your digital currency in a good place. While understanding trading and gas fees would help you in projecting your profits and hopefully not losses in your investment days ahead.
Where to buy Bitcoin and cryptocurrencies?
Cryptocurrencies can be purchased through crypto exchanges. Beginners always find it challenging to select the preferred exchange especially in light of many scams, hacks, and privacy issues. Here is some guidelines to your selection criteria,
1 – the trustworthiness of the exchange,
2 – is the exchange regulated and what is needed for registration,
3 – the transaction volume of the particular token,
4 – the type of listed tokens available, and
5 – whether does it allow deposits in your local currency or via credit cards
Get to know your selected exchange better by finding out the rankings of the exchange you selected. Coinmarketcap provides a ranking of crypto exchanges globally, their rankings are tabulated across several requirements such as bounce rates, organic traffic, and keyword searches. Another option is to look at a third-party certification site, cer.live, which gives you a list of crypto exchanges that have met their requirements through cybersecurity scores, penetration tests, proof of funds, and many more.
Being number one on the rankings does not mean it is the best, let us take a look at the largest exchange, Binance’s recent predicaments,
Binance was investigated for insider trading by the US, read the article, in addition, the Monetary Authority of Singapore also requires Binance to comply with their Regulated Payments Services before reopening services to Singaporeans. Aside from Singapore, Binance was also alerted for operating without licenses in Thailand, the U.K., Malaysia, and Japan.
To be a regulated exchange takes time
ABCC Exchange is currently holding an exemption to continue business operations while pending the issuance of the Major Payment Institution Licence (MPI) under the Payment Services Act from the Monetary of Singapore, where it needs to ensure the exchange must act in accordance with the Anti-money laundering (AML) and the countering of financing of terrorism (CFT) legislation of Singapore.
In order to provide a safe trading environment for the users, ABCC conducts annual Vulnerability Assessment and Penetration Testing (VAPT) with an external party and provides the basic 2FA protocols for users.
Understanding Know-Your-Customer (KYC) on ABCC, read here
So should you or should you not invest in Bitcoin?
Here are some of the considerations before taking the leap,
Pros
1 – It is a diversification option for your portfolio.
2 – It is a financial product with predicted high potential.
3 – There are little third-party fees involved in each transaction, mainly trading and operation fees.
Cons
1 – It is a high-risk product.
2 – Highly susceptible to scams and frauds.
3 – There is no basis for its fluctuation.
Note: this is not a piece of financial advice, readers who are keen to invest in Bitcoins or any tokens should be responsible for their own actions.
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