One of the most frequent questions we get here at Monfex is whether to hold or to trade cryptocurrencies. It’s not enough to just advise people to get on to the Bitcoin train without telling them how to conduct themselves. It’s pretty much like telling people to get aboard a ship without giving them a clear idea of the destination. People want to know if it is wise to just cut their losses and trade Bitcoin after a price drop, or hold on to the asset hoping for a strong movement north in the near future. We make it extremely easy to both buy and trade here at Monfex, so this question is squarely in our purview.
Bitcoin’s up and down movement should tell you whether you want to invest. Bitcoin (BTC) dropped by 80 percent from its 2017 all-time high last year to settle at $3590 back in December. 2019 has seen the largest digital currency by market cap (BTC), regain some respectability having gained by 150 percent by October 2019 from its early year lows. These fluctuations maybe scary but they do speak to one thing, no asset in existence be it Gold, or any commodity or currency gains quite like Bitcoin. Comparisons drawn between Bitcoin and Gold have fallen flat because Bitcoin has outperformed gold every year since 2011.Another factor to think about is the global economy. The world economy is growing at around 3 percent which is the most positive indicator since 2011. This is a good forecaster for Bitcoin’s future and hints at possible better times even though the digital currency was created to disrupt traditional financial systems. Trading Bitcoin has its gains since one can gain significant amounts from the ups and downs. Holding can also be great if the market experiences a surge. It’s really up to you. Some though are of the opinion that holding is dangerous. This school of thinking is quite understandable. What happens if you hold on to your BTC holdings only for your prices to hit rock bottom over a weekend?