Before you get carried away with the whole Bitcoin euphoria, it is only important to understand some basic things about it. It seems everyone is only talking about the goodies. However, no one will tell you about the likely issues that you might face.
Technical issues on crypto exchange sites
The recent soaring price of Bitcoin really made the major bitcoin exchanges experience system overload. One such exchange is Coinbase, a popular crypto exchange site. There were also technical issues like minor service outages caused by a high traffic.
This can sometimes make buying and selling pretty difficult. It seems like Coinbase crashes have occurred sporadically during heavy trading days since 2015.
On other markets, when the price of the commodity goes up, then investors can take advantage of this and sell to make a profit.
But since bitcoin’s liquidity doesn’t really allow for that completely so it becomes difficult to do so. Nobody wants to sell when the prices are falling which means that it automatically means counting losses. Well, this trend may likely change in the future.
Unpredictability of bitcoin’s value
Those who plan to invest in bitcoin should be prepared for its risks. It is simply not an ordinary financial product. The price can go up or down at any given time.
So, if your plan is for an emergency investment that you can immediately fall back on when the needs call for it, then it would be a wise thing to invest your money in some other venture and not risk plunging into bitcoin market.
It doesn’t mean that it is impossible to still make profits. For instance some people buy bitcoin units and decide to sell it to local brokers physically.
Maybe this method might be helpful when dealing with the funny issues exchanges experience.
Whatever your plan is, identifying the pitfalls will help you make the best decision when trading your bitcoin.