We live in a world where cryptocurrency is projected to be the future of monetary exchange. With many investors looking for opportunities to diversify their portfolios, bitcoin, one of the most popular and known digital currencies, presents an alternative to traditional assets.
No investment is entirely risk-free, and bitcoin investing has some downsides as well- let’s see what risks could trade bitcoin carry
The bitcoin market is constantly changing and has proved to be unpredictable throughout time. This is mainly due to the number of coins in circulation and how big the demand is. Bitcoin is limited to 21 million coins – the prices are likely to get higher as the supply reaches its limits.
2. Security issues
Since cryptocurrency is technology-based, bitcoin trading is open to cyber attacks. This means that if your bitcoins were stolen or lost, it is impossible to recover them. Bitcoins are kept in hard wallets, which can be opened with a security key(similar to a password- a string of letters and numbers) and, if the key
is lost or stolen, you will never have access to the wallet, and, therefore, to the bitcoins you own.
Bitcoin ETFs- a simpler and more secure way of investing
If you are a professional investor interested in investing in bitcoin without the work that comes with actually owning a bitcoin, a bitcoin ETF(an exchange-traded fund which tracks Bitcoin pricing) could be the best option for you.
Bitcoin ETFs trade on traditional stock exchanges rather than crypto exchanges and represent a simple and secure option to expand the investment portfolio, as they are convenient and secure.
Investing in bitcoin can turn out to be complicated and complex even for the most experienced investors, as any of the cryptocurrencies can’t be traded on a stock exchange. A more compliant, secure and accessible product to diversify your portfolio is a bitcoin ETF. Digital asset management platforms could help you with de-risking investment without having to worry about the technical details.