Around Bitcoins began a big excitement, which attracted even those who did not think about buying cryptocurrency and did not want to dive deeply into this topic. What is happening in this industry can be called a small revolution. The perspective of it is not able to be predicted even by very experienced analysts. In 2017, Bitcoin’s capitalization was 80 billion dollars, and then it jumped to 200 billion. Daily turnover is calculated in sums with ten zeros.
Bitcoin’s popularity continues to grow, despite some decline in the course. It is not surprising, because sharp jumps make this coin an attractive investment object. However, it is not excluded that the constant increase in quotations or maintaining them at a steadily high level cannot last forever. Some experts believe that sooner or later, the market will collapse. At the same time, other analysts assure us that Bitcoin is still far from its limit, and even reaching it, the currency will not collapse. All this puts an ordinary user who wants to become a crypto professional, at a dead end. He/she cannot understand whether Bitcoin is profitable or not.
From which the Bitcoin course depends
In principle, there is nothing new in Bitcoins. Their course, as in the case of other active currencies, depends on demand. Any user who has taken control of a certain amount of currency can collapse or activate the market if inexperienced beginners will be confused.
Periods of increasing and decreasing demand are characteristic of any cryptocurrency. It happens with enviable regularity and depends on the readiness of the clients to work with electronic money. Bitcoin rate increases with active demand for other cryptocurrencies. The rules are simple: if people appear in the industry, ready to purchase tokens, the indicators will begin to grow. At the same time, if the rapid jumps of quotes are observed, this indicates that the so-called pumpers began to operate.
Pumpers are a separate type of market player, in the hands of whom significant assets are concentrated. They can quickly buy part of the Bitcoins and raise the course to the limit indicators.
Mostly, pumpers, when the general confusion begins, try to buy orders. Because of this, the visibility is that the quotes of Bitcoin grow uniformly. Then a panic is formed in the market, and newcomers are activated and start to buy coins. At the peak of the operations, pumpers dump (lower prices) and want to implement accumulated assets. After such manipulations, the currency rate is reduced to the minimum threshold. At this point, the manipulator buys even more tokens and waits until they grow up.
In principle, the change in any course, even the global currency, is tied to its popularity, news, and advertising campaigns. The stronger users are shipped into the nuances of a particular product, the more they strive to become part of it: to invest, and play the stock exchange. Among other things, the course is also influenced by the prevalence, of the use of electronic money. Today, the same Bitcoins are actively advertised by the media, which undoubtedly affects growth. However, sharp jumps still have to correlate with weighty players who are often covered with favorable news, mostly invented and chosen by them.
Risks in long-term investment
Is it profitable to buy Bitcoin? Cryptocurrencies are especially interesting if you perceive them as an investment objects. The easiest interaction strategy can be the principle of buying and holding. It is relevant for long-term investments.
The increase in prices will ultimately lead not only to the global legalization of cryptocurrency and the growth of public interest. The emission of most tokens is limited by computing, which will affect the quotations. The system itself is designed in such a way that it is impossible to produce a more intended number of coins. In the case of Bitcoin, the maximum threshold is 21 million units, for its competitor, LiteCoin is 84 million.
In short, the crypto technology market may suffer due to tangible oscillations. For example, from 2009 to December 2013, Bitcoin rose from 0 to 1.2 thousand dollars. Then, by the beginning of 2015, it was rolled to $160. After 2 years, the indicators were rearranged to 1.2 thousand dollars again, but in just 7 days they fell to 760 dollars.
Even a couple of operations can lead to a strong fluctuation in the cost of cryptocurrencies, and no one says that these jumps will be on the positive side. The risks of investing in Bitcoin are connected mainly with the features of the coin. At the moment, this token is decentralized, but it will gradually begin to increase the tag for centralization. It is because Bitcoin’s course is increasingly influenced by the platforms on which they buy and sell crypt. The mining itself is a primary way to obtain a digital currency, gradually collected within a narrow circle of players. There is powerful equipment in their hands, allowing you to work with Bitcoin in large volumes.
As a result, it can be said that the investment in Bitcoin is promising, but an extremely risky decision. Despite the predictions of analysts that the course can rise to 50, and sometimes up to 100 thousand dollars over the subsequent years, everything is much more difficult. Due to difficulties with legislation, anonymity, and novelty technology, everything can happen. It is possible to invest in Bitcoin, but it is not recommended to bring all the money in it. Once again: it is promising, but extremely highly adjacent investment industry.
