Bitcoin VS Traditional Investment: Three Major Investment Advantages of Bitcoin

Traditional investors are always very cautious when it comes to digital currencies like Bitcoin due to its high volatility. However, in the past few months, Bitcoin has successfully attracted a large number of traditional investors as an investment method and currency.

Compared with traditional investments, Bitcoin as an investment tool can provide investors with three major advantages: greater liquidity, higher market demand and simpler transactions.

Liquidity

Currently, Bitcoin is considered one of the most liquid assets in the financial market because Bitcoin exchanges, trading platforms and trading participants are distributed all over the world.

Investors or Bitcoin holders can easily convert Bitcoin into cash or other assets, such as gold and other cryptocurrencies, and the transaction is instant and the fee is low. Unlike company stocks or some publicly traded funds, they still rely on third-party institutions such as stock exchanges to process and settle orders.

In regions such as Venezuela, Brazil and Argentina, foreign currency and overseas asset transactions are not allowed due to strict financial regulations, but these countries still have a number of Bitcoin exchanges and trading platforms. In this way, Bitcoin holders can transfer their assets abroad and directly bypass government supervision.

Bitcoin’s liquidity has created a vibrant ecosystem for investors, especially those seeking short-term gains. However, the digital currency can actually be a long-term investment as its market demand is considerable.

Market demand

Traditional investors often question the market demand and value of Bitcoin. Their limited understanding of Bitcoin technology leads to their ignorance of the Bitcoin economy and how its market value is determined. Ultimately, Bitcoin will be like other assets in the market, and its value will be directly linked to demand.

The value of Bitcoin will continue to rise unless the demand for it disappears completely. Three years ago, the market value of Bitcoin was less than $1.3 billion, and now it is close to $10 billion.

Marc Warne, founder of Bitcoin trading platform Bittylicious, explained:

In the future, more people will use Bitcoin because it is only used on the Internet and is not controlled by any government or bank. Bitcoin has been 'born' for more than 7 years, but no major changes have occurred.

The market demand for Bitcoin provides an excellent long-term investment opportunity for its investors. In theory, Bitcoin is a deflationary currency. Before the supply of Bitcoin breaks through the peak, its value will continue to rise.

Convenient transactions

In stock trading, or other public stock market activities, investors need to hold a specific license or certificate to prove their identity and trading history. When trading company stocks, investors need the help of brokers to place orders. The settlement of orders usually takes several days, weeks, or even months.

Stock exchanges also require investors to submit personal information and financial transaction accounts, such as bank statements, settlement statements, and personal identification, making it difficult for unlicensed investors to participate.

Compared to securities trading, Bitcoin trading is relatively simple. Investors can buy and sell Bitcoin on exchanges and then store it in their own wallets. Some exchanges may ask for personal information due to Know Your Customer (KYC) regulations, but other local exchanges will operate orders anonymously.

In short, Bitcoin's financial and economic advantages are enough to overwhelm traditional investments. Traditional investors can choose digital currencies as short-term and long-term investment tools because of their efficient transactions and low costs.