Bitcoin has its advantages and disadvantages too
Bitcoin has tanked about 8 percent in the last two days, breaching US$50,000 levels, and has been trading below the key psychological levels ahead of the new year. There has been a series of events that has put the top-notch digital token on a downward slide for a month now. The comments of Tesla CEO, Elon Musk and US Treasury Secretary Janet Yellen have added to it.
Yellen has called Bitcoin an ‘extremely inefficient way of conducting transactions’ and also warned of its use in illicit activities. While coming to Elon Musk, he said that the price of Bitcoin seems high. But earlier that week, Tesla also has announced that it has bought Bitcoin for US$1.5 billion.
There are a few concerns that are raised by a few of the critics regarding the sheer level of electricity that is required to produce new crypto coins. This dip is not the only case with regard to Bitcoin, it has been the same with Ethereum, Solana, Polkadot, XRP, Cardano, Avalanche, and Polygon which have experienced a fall.
In November, Bitcoin hit its all-time high of about US$68,790. But it has been witnessing the fall for a few days. The crypto behemoth’s dominance has taken a severe hit as the total market cap of the digital coins has breached nearly US$1 trillion.
Though there is no guarantee that Bitcoin will continue to rise in the coming years, there are some good reasons investors should consider too. Since BTC is the oldest and most widely accepted cryptocurrency it can also be a good investment when we look from the other side of the coin. As every investor has a risk tolerance level, the tolerance levels should be more for the Bitcoin investors as the cryptocurrency prices tend to fluctuate.
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