Benefits of Trading Cryptocurrencies

The amazing world of cryptocurrency has developed from a promising idea to a widely-accepted form of exchange that has worldwide recognition. The cryptocurrency exchange is no less active and thriving than the forex market or any stock exchange. It does offer certain advantages that fiat currencies or commodities do not. Here’s a look at some of them:

Scarcity Value
Although millions of Bitcoins and other cryptocurrencies are in circulation, their supply is controlled by algorithms or their source code. Trading in cryptocurrencies is similar to trading in gold or diamonds, in that they have built-in scarcity value and offer protection of wealth against inflation.

High Profit Potential
Trading in cryptocurrencies can prove to be extremely profitable for both experts or beginners alike. Cryptocurrency exchange offers huge spreads and high margins. The cryptocurrency market is very volatile, which presents attractive opportunities to make profits. Of course, as with any investment that offers huge profit potential, cryptocurrency trading also involves significant risk.

Safe and Secure
The complexity of the cryptocurrency networks supports safety. Of course, some are safer than others. For instance, Bitcoin is backed by a highly complex algorithm and requires very powerful computers and a group of highly intelligent and experienced software engineers to produce. Bitcoin mining involves a huge investment and is profitable only when done on a large scale, that too, at very low margins. This makes Bitcoins more secure. Moreover, cryptocurrency exchange is monitored by the community, powered by a self-policing mechanism.

Not a Victim of Government Monopoly
The supply of fiat currencies is monopolized by the government and its supply is controlled by the nation’s central bank (like the US Fed or the ECB). While the central bank can print more money, the government can impact its supply by regulating its monetary policy. This is not the case with cryptocurrencies, which are based on a decentralised system that is regulated by the community.

Anonymity
Anonymity is among the main advantages of cryptocurrencies. Cryptocurrency users and traders often use pseudonyms that are not connected with their personal details or accounts.

With these benefits, trading in cryptocurrencies has gained huge popularity. Some cryptocurrencies, like Bitcoin and Ether, offer more liquidity and profit potential than others.