What is Bitcoin Spot Investment (Is Bitcoin Cash Worth Investing)?
What is Bitcoin spot investment? Bitcoin spot investment is a complex financial
What is Bitcoin spot investment? Bitcoin spot investment is a complex financial service, with its main advantages including: no need for trust; no risk management of banks or central counterparty. Compared to traditional assets such as stocks and bonds, the cryptocurrency market is relatively easy to obtain liquidity. However, if we consider the lack of regulation in the cryptocurrency market, this technology also has many shortcomings: 1. Investors are often unwilling to buy on the open market and only want to trade through over-the-counter exchanges; 2. Since most people consider digital assets as a highly volatile hedge tool, it is difficult to make the right decisions on whether to hold them; 3. In order to avoid manipulation, the leverage ratio needs to be set below 1. In general, when you use Bitcoin futures contracts, you may incur losses or your position may be affected at certain times, resulting in a sharp decline in prices. This may result in the loss of some positions and a decrease in yield. What is Bitcoin spot investment? Why adopt Bitcoin spot investment? First of all, it must comply with the regulations of the Internal Revenue Service (IRS). In a recent report submitted by the U.S. Securities and Exchange Commission (SEC), it mentioned that “Bitcoin spot funds” are very valuable products and listed various other types of products to help protect users from the impact of fraudulent activities, such as tax evasion, hacking attacks, and other criminal activities. “Bitcoin spot ETF” can be used as an asset category and can also be used to purchase stocks and other commodities.
In addition, for those who want to sell their stocks on the secondary market, these products are safer than directly participating in cryptocurrency derivatives trading. Although some companies hope to raise funds from investors to support their plans, they are not prepared to provide any additional margin or custody solutions to investors, such as Bitcoin futures. They are looking for a new platform to access the real needs of customers and their risk preferences. What are the characteristics of Bitcoin spot investment? The first thing to understand is that Bitcoin spot investment is highly speculative and has variable returns. Secondly, Bitcoin spot investment not only involves Bitcoin mining, but also utilizes Bitcoin’s price discovery function, making it one of the ways for investors to invest in the long term. (Bitcoinist)
Finally, the basic goal of Bitcoin spot investment is to obtain a higher market share, rather than waiting for more institutions to enter this field, as people are easily trapped. As the Bitcoin market matures, one thing that investors should be aware of is that Bitcoin has started to become increasingly popular. Although many people attribute this to Bitcoin itself, in fact, it does not have a real use case, and its development space is still large.
Is Bitcoin Cash worth investing?
Bitcoin Cash is the world’s first digital currency issued by private companies, with the highest degree of decentralization compared to the Bitcoin network.
Since 2017, it has received people’s attention and enthusiasm. With the asset’s price rebounding to historical highs after a sharp decline in January 2018, its market value has also increased significantly. As of June this year, the price of BTC was around $7,190, while BCH has fallen from its peak in late April last year to below $29,000. Nevertheless, Bitcoin still maintains a relatively high historical volatility, which is still much lower than the performance of mainstream cryptocurrencies such as Ethereum and Litecoin. So, is Bitcoin Cash worth investing?
Let’s take a look at its development history first:
At the beginning of 2019, when US President Biden signed a new bill on “ensuring financial market stability,” he stated his intention to promote economic recovery and make it easier for companies to use blockchain technology to reduce costs, improve efficiency, and reduce operating time. In early November 2020, when Trump announced that all states would be considered legal tender, Bitcoin Cash was considered one of the safest networks and could continue to be used as a means of payment. However, these measures did not effectively prevent the development of Bitcoin Cash. In addition, US Treasury Secretary Steve Mnuchin also stated in mid-May that Bitcoin is not a real commodity and hinted at the possible introduction of more tools for central bank digital currencies. (Note: The author of the Coindesk article described Bitcoin Cash as the only product that can avoid inflation risks). By the end of 2021, due to ineffective government regulation, all countries around the world are requesting banks to provide services to customers.
However, by the first quarter of 2020, this trend seemed to not keep pace, which indicated that some people were concerned that U.S. Treasury Secretary Janet Yellen was considering whether to approve Bitcoin Cash transactions, and even allowing Bitcoin to be transferred on exchanges outside the United States, as these measures might lead to further uncertainty and threats to the identities of U.S. citizens. At the same time, Bitcoin Cash developer Tim Draper pointed out that although the recent halving had forced investors to seek alternative methods to cope with the crisis, this concern did not affect the opportunities for any project or company to succeed. “We must make our own choices.”
Of course, many analysts believe that Bitcoin Cash has the potential to become a major competitor to replace gold, especially in some cases where they may replace fiat reserves such as the US dollar and the euro because they tend to hold more cash.
If this situation occurs, then Bitcoin Cash is the best choice. In fact, during the bear market in 2017, most investors were betting on Bitcoin Cash, but Bitcoin Cash failed to make progress at that time.
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