Bitcoin is a symbol of virtual currency in crypto asset trading, but it also comes with debt risk, which I will explain in the article. However, there is no such thing as 100% in investing. Many people are worried that even Bitcoin may lose its principal value.
What is Bitcoin?
Bitcoin is the world’s first blockchain-based coin. When it comes to virtual currency, many people think of Bitcoin. Bitcoin is the base currency for legal currencies. Bitcoin is not only the most well-known crypto asset currently in circulation, but also has an overwhelming amount of transactions. Since the amount and price are stable, it is easy to reduce losses and make profits when starting out. We will introduce the following information about Bitcoin.
| Symbol | BTC |
| Issue upper limit | 21 million |
| algorithm | Proof of Work |
| White Paper | Bitcoin.pdf |
| URL | Bitcoin.org |
use blockchain
Bitcoin uses a technology called blockchain for transactions. Blockchain is a bitcoin transaction technology that acts as a ledger that summarizes the records of bitcoin transactions. It is called a blockchain because it manages transaction data called transactions in blocks and distributes them as a single chain.
there is no central bank
Bitcoin does not have an entity like a nation or central bank. This is an advantage because it is a highly flexible coin that is not subject to lending or intervention from the state or central bank. Judgments are made by each individual. From a business perspective, it has a lot to offer. It can also greatly reduce risk.
Upper limit on the number of issued
Since the birth of Bitcoin, the number of coins issued has been set at 21 million. In the case of Bitcoin, there is no central organization to manage it, so if it is issued carelessly, there will eventually be too many Bitcoins in the market and the value will decrease. There is a pre-determined maximum number of copies.
send money worldwide
Bitcoin can be sent 24 hours a day, 365 days a year, wherever you are. This is not limited to any country or region. You can send money no matter where you live in the world. International remittances through traditional banks are affected by bank business days. This is also very convenient.
Loss of principal in cryptocurrency investment
A loss of principal in a virtual currency investment refers to a fall in value that is greater than the original capital, resulting in a negative loss. Specifically, the reasons are as follows. When holding it, you will need to trade FX to make the maximum profit in the fluctuating market price. Bitcoin allows spot trading, and among the stocks offered, it is the most stable compared to products such as Ethereum (ETH). If you have experience, you can manage it yourself from now on and buy and sell safely.
Mistiming the settlement
As a disadvantage, even if you buy cryptocurrency as a failure, mistiming the settlement can also be a negative. Some people say that they left it alone and it went down, so they panicked and settled. Anyone will panic if they start buying in the service and it goes down. If you don’t do the calculations, you will be swallowed up by your emotions in no time. Our company can hold a large amount of actual goods for a long period of time. As a countermeasure, even if it goes down, it is important to look at the overall situation and settle, rather than checking your wallet each time. We recommend starting with the minimum amount when withdrawing or exchanging BTC.
Loss is greater than invested capital
When trading cryptocurrencies, which experience rapid price fluctuations, the amount you lose may exceed the amount you invested. Virtual currencies have higher liquidity than fiat currencies. Therefore, this situation may occur. When making a contract or placing an order, be sure to check the timing of a slight rise in prices before making a bid. It is important to do business diligently and carefully. Prediction is easier than altcoins.
too much leverage
Cases where excessive leverage can result in large losses are not limited to virtual currencies, but can also occur in the exchange market. Leveraged trading is a system that allows you to trade dozens of times the amount of your funds using margin as collateral. There are big returns and big risks. Without sufficient knowledge, there are high risks with financial products, whether stocks or virtual currencies. Investors should be careful when buying or selling from now on, whether through staking or derivative transactions. If you can earn a lot of money, you can live on that.
hacking
Hacking incidents of virtual currency exchanges are occurring frequently in a wide range of areas. Cases of funds disappearing due to exchange hacking occur frequently, even at famous exchanges. This is happening at exchanges all over the world, and if your virtual currency is stolen, you will of course lose your principal. Be sure to understand the terms of use and security status before investing. This can result in significant losses compared to insurance. Be especially careful when operating for a long period or trading automatically.
Bitcoin may lose its principal
As mentioned above, it will be case-by-case, but even with the most stable coin like Bitcoin, if you make a mistake in how you invest, you will carry the risk of losing the principal. So make sure you don’t misunderstand how it works. We recommend using a secure virtual currency exchange. In that sense, Bybit is very safe. Security measures are also solid at the world’s top 10 exchanges.
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