Embracing Risk: Balancing Reward and Uncertainty in Bitcoin Trading (2023)

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Bitcoin gold coins with wallet, close-up. Virtual cryptocurrency concept.
Source: cryptonews.com

How realistic is using cryptocurrency as money? Cryptocurrencies use time-consuming mining and expensive settlement delays to avoid double-spending.

By adding an incentive constraint that prevents duplicate spending and quantifies the detrimental consequences of Bitcoin on society, we formalize this concept.

We come to the conclusion that the optimum method for financing pricey mining is seignorage rather than transaction fees.

Our estimates show that the negative effects of Bitcoin on society are approximately 500 times greater than those of a currency-based economy with 2% inflation.

This loss of welfare can be minimized to the extent of a currency economy with an inflation rate of about 45% with proper planning.

So, what do you need to know about any potential risks and the future of Bitcoin? We bring you those answers right down below!

Is Bitcoin price set to hit new highs in 2024?

Source: investingnews.com

Bitcoin believers are optimistic about the cryptocurrency’s prospects as a “safe-haven investment” in the event of a worldwide financial disaster. They believe that Bitcoin is great potential for investors to hedge their risk or generate high returns despite the current economic climate.

So, it wasn’t by chance that Bitcoin prices started going up again in Q1 of 2024. According to Coin Market Cap, Bitcoin’s value surpassed $30,000 USD on April 10th, 2024, shortly after the Easter holidays.

As the Bitcoin price continues to grow, it is essential to compare it to the previous bull run, which petered out last year. Bitcoin hit a record high of $69,000 in 2022 after the Fed released $4.189 trillion in response to COVID in 2020.

The Federal Reserve is currently attempting to save the banking system by injecting $300 billion into the economy to help depositors of two failing banks. Inflation will rise as a result of this. Inflation is the root cause of market bubbles, and bubbles always pop.

Several factors are considered to be influencing the current bitcoin price fluctuation. Some have speculated that regulators’ once-unwavering focus on the cryptocurrency sector has shifted to banks and traditional financial institutions.

According to some experts, the spike may be due to speculation that the Federal Reserve may halt interest rate hikes at their upcoming FOMC meeting. The next Bitcoin halving is set for April 2024, and long-term fans expect a rally back to former highs before halving, and new highs post-halving.

Risk asset recovery cycle

When the market expects a rate cut in the fourth quarter of this year, as is the case with interest rates, bitcoin tends to recover more quickly than stocks.

Business balance sheets take longer to reflect an economic recovery, and the size premium (Bitcoin’s small size in comparison to the equity markets) also plays a part.

Alternative investing opportunities with higher returns and reduced correlations to traditional assets are still being sought for.

Being the first decentralized, immutable, fixed-quantity digital asset, Bitcoin is a competitive alternative to more traditional investments for individuals looking for higher returns.

When should you take out your crypto profits?

Crypto profits
Source: stormgain.com

Since it is hard to predict when the market will rise or fall, it makes sense to adopt a long-term investment plan that combines HODLing with a DCA approach. If you wish to sell your cryptocurrency to lock in earnings, you should do your own study to establish the coin’s long-term value.

On occasion, you may consider HODLing, especially if the coin in question is one you have faith in. In addition, we suggest aiming for perfect results. After all, market timing is difficult, and we don’t need to consistently hit home runs in order to benefit from diversification.

Instead, focus on changes that will have a smaller impact (30%). Instead of waiting for a 50% or 100% incremental gain, focusing on a small increase will raise the likelihood that you won’t be caught in the discouraging 20% to 40% correction that can hit the rapidly altering crypto market.

Focusing on the best possible gains also has the additional benefit of allowing you to make use of the power of compound interest by reinvesting your gains in additional coins that are just starting to run in price.

This methodical approach has the potential to generate impressive returns for your investment portfolio as a whole due to the power of compounding. Finally, selling makes sense if you’ve researched and are interested in investing in other opportunities.

Have the right approach

Due to its simplicity of use, using a Bitcoin exchange website is one of the most popular ways to obtain Bitcoin.

The steps basically consist of making a cryptocurrency wallet, purchasing Bitcoin using fiat money, and then selling the Bitcoin for a predetermined sum.

Make sure you’re working with a reputable company throughout this procedure to enjoy the process and avoid any risks.

Working with renowned, reliable platforms and brokers is the only way to avoid falling for a scam. More businesses and individuals are developing cryptocurrency wallets “just in case.”

A business should always accept a variety of payment options, especially if one of them is well-liked globally.

Adopting Bitcoin as a payment method can be a wise choice if you want to increase the worldwide reach of your company because it simplifies the purchasing process for both you and your clients.

Where to get help with Bitcoin trading?

Source: entrepreneur.com

The trader/user has a variety of trading alternatives at their disposal, including using trading software, using human brokers, or placing their own trades. It is the trader’s exclusive obligation to determine which option is the best one for them to utilize.

When it comes to Bitcoin trading, there are several wrong paths you can take, and you may not even notice until it’s too late. If you want a bit of help from a team of experts, check out bitcoin-buyer.io.

This is a home-brewed trading platform that has been in the works for years, and the platform team is very proud of what they’ve accomplished.

While no trading technology in the world is perfect, they’re constantly working on it and making it easier for you to understand and profit.