Have you ever imagined what it’s like to be sucked into a black hole? No, right!? How about throwing things and disappearing for good? Now that context is included, we can expand into applications of a black hole. On a serious note, a black hole is a specific “region” in space-time with immense gravitational pull. It’s so strong that not even light can escape once it touches the event horizon which means no one can see what’s beyond and what next is to happen.

Similar to some aspects of the black hole, cryptocurrency markets also have violent pulls, much more damaging than how securities behave in their support and resistance rallies. The behavior is unhinged, and when values shoot up, there is no limit to how high it could peak. Bitcoin (BTC) in September 2021 was USD. 45,965.46 high and within a month rose to USD. 58, 051.64 in October of that same year. The same liberty applies when values take a sudden dive too, and like how black holes suck matter and light down, dives in cryptocurrencies are also violent.

There’s no rule limiting the dive duration, when it will stop, and how deep it will get. This year Bitcoin’s (BTC) March value was USD. 47,063.37 high, but it dived drastically to USD. 20,952.76 at the time of writing. That is a 55.4% drop in value. And when this scenario meets an overconfident trader, one may find a huge chunk of their portfolio gone instantaneously. Now you may consider if your risk profile is still consistent with the loss you can bear.

Protection and Vulnerability

Riding on the fast streams of blockchain structures and protected under the shade of smart contracts, the immutability and instantaneousness of each transaction are secured on a technical level. No amount of traditional hacking or legal interference can stop you from taking advantage of the market dynamics on behalf of your portfolio’s interests.

But the absence of central authority governing and implementing policies is not a form of absolute liberty. The world saw some big exploits happening. Luna was the biggest one that shook the whole crypto world.

Efficient Transaction and Fraud

Blockchain has already been adopted by numerous private and public organizations like IBM, Microsoft, Tesla, Daimler, Alibaba, and AXA Switzerland. In a non-trading approach, cryptocurrency or blockchain as an application has many use cases like applications in payment systems, recording of data, and more.

The blockchain infrastructure offers efficiency and security of process from one end to the other. Unfortunately, as this model eliminates traditional vulnerabilities of fraudulent practices that are faced in the overall financial markets, it also introduces some form of a window for scamming the novice.

Appreciating Blackhole

Blackholes are crucial in synergizing star systems within galaxies like the one we are part of, the milky way galaxy. This is, in a way, a benefit in contrast to its almost-immeasurable capability to destroy planets and even stars.

Cryptocurrency and the trade of such also present a similar nature. Its qualities and features attract and put together many types of investors: neophytes, seasoned traders, well-funded capitalists, banks, researchers, and entrepreneurs. Crypto as part of the portfolio could provide a hedge to boost gains but invest heavily with impartiality might pose risks that surprise even the most seasoned investors.

Like Black Holes, risk parameters get blurred if you get too close or attached to cryptocurrency. If this happens, the propensity for you to make faulty decisions and trade plays goes above the roof, and all will be sucked in and lost.

If you have any suggestions or wish to add your input, please leave your comments in the comments section.

For more such informative articles, subscribe to our page: https://contentonweb.com/Disclaimer: Please note that the information provided in this article is for informational purposes only and should not be construed as investment advice. Investing in financial markets involves risk, and individuals should carefully consider their own financial situation and consult with a professional advisor before making any investment decisions. The author and the publisher of this article do not accept any liability for any loss or damage caused by reliance on the information provided herein.