This article will come in handy if you are wondering whether digital currencies like bitcoin is are wise investments or how to invest in bitcoin. Fans hail and welcome cryptocurrency as a market-disrupting liberation, while n the other hand, critics demonize and portray it as a volatile creation. Cryptocurrencies are always in the news headlines very often.
There’s a certain aura of mystery that surrounds cryptocurrency. Satoshi Nakamoto is the pseudonym the developers of bitcoin use. They also created and deployed bitcoin’s original implementation software and conceived the first blockchain database.
Do you think about these questions, or are you generally interested in any of the following?
- Investing in bitcoin
- Bitcoin investment strategy
- How can I invest in bitcoin and make money?
- Is Bitcoin a good investment
- How to start investing in bitcoin
- Read also Trusted bitcoin investment sites.
- How to make money in 2020
What Is Bitcoin ?
It is probably hard to believe that a digital currency is worth thousands of dollars. In and of themselves, the lines of code that make up each bitcoin are worthless. Although, money markets value a single bitcoin to be worth thousands of dollars. Bitcoin has value partly because it has lower transaction costs when compared to credit cards. Moreso, Bitcoins are scarce and will become harder to obtain over time. The rate at which the developers produce Bitcoin cuts in half every four years. Traders of cryptocurrency expect it to further cut in half sometime this year. Bitcoin’s creator, Satoshi Nakamoto, set a limit of 21 million in 2009, and the total number of bitcoins in circulation is gradually approaching this limit.
Where the demand for bitcoins exceeds its rate of production, the price will likely increase. The total number of Bitcoins already created as of January 2020 is 18.15 million, or a total of 86.42%.
This situation does not guarantee a price increase. Cryptocurrencies are highly unpredictable, even popular ones like Bitcoin. For example, Bitcoin was worth roughly $19,116.98 on Dec. 17, 2017. However, the price fell significantly and is yet to recover in 2020.
The value of Bitcoin heavily depends on the faith of investors, its integration into financial markets, and the interest of the public in using it. How it performs against other cryptocurrencies like Ethereum is also crucial in determining its value.
Is bitcoin a good investment?
Bitcoin sits at the (very) “high-risk” end of the investment spectrum. The prices of cryptocurrencies are very volatile. Some can go down the drain; others may be a scam. While occasionally, it may increase in value and produce a return on investment for its owners.
According to Danny Cox, from a financial services company Hargreaves Lansdown,
“Cryptocurrencies can remain stagnant, become mainstream, or vanish without a trace, and any investment is seen as very high risk.”
As is advisable with any investment, make sure to do your due diligence. Do not place all your assets in one company or one cryptocurrency: Be sure to spread your money, and in doing so, spread the risk.
Ways to Invest in Bitcoin
Investing in Bitcoin can seem complicated, but it is much easier to break it down into steps. You don’t have to understand computer programming to realize that banks, businesses, the bold, and the brash are cashing in on cryptocurrencies. This article will help you get started, but always remember that Bitcoin investing carries a high degree of speculative risk.
Is there a less risky method of investing in cryptocurrency?
According to Gavin Brown, an associate professor in financial technology at the University of Liverpool, “Stablecoins” is a less risky means of investing in cryptocurrency.
“Stablecoins continues to develop and maybe the potential solution to the problems of volatility and credibility for crypto assets. Unlike cryptocurrency, and much like stablecoins have actual assets behind them,” he says.
DAI and TUSD are two of them. The US dollar backs each (one coin is worth $1). Gavin further states that the Maker (MKR) platform hosts DAI. This measure makes crypto platforms safer to invest in than real currency. “The risk here is low, but gains thereof are very low or even nil too.”
Brown points to Tether he says, the most significant stable coin, which a dollar backs per coin. “During the pandemic and lockdown, Tether bounced back. Not only does it maintain its position as the biggest stablecoin, its market value is now double – from $4.6bn to $9.2bn. This rise in price shows volatility may have gone down.” Although, potential investors need not see Tether as the next big thing. “In reality, Tether may not be worth more than a dollar at any point. It is an interesting option for any portfolio that is varied to include Tether. it may be a slice of stability were other things start to suffer.”
Brown posits that it may be less risky to make long-term investments in the companies associated with cryptocurrencies. For example, shares in Facebook, which is planning to launch its Libra currency soon, JPMorgan, which has the digital JPM coin equal in value to the US dollar, and the bank Wells Fargo, which is developing a US dollar-linked stable coin.
How to Invest in Bitcoin and Make Money
It is the process of creating new coins, and verifying transaction information. High-powered computers which solve complex mathematical problems carry out the mining. Bitcoin is the reward for miners, whenever they add a new block of transactions to the blockchain.
You can also invest in Bitcoin by purchasing and storing the cryptocurrency to hope that its value will increase over time.
Bitcoin is hugely a high-risk investment, and its price is volatile. So, it is advisable to only invest if you deeply understand the concept of trading Bitcoin Trading. Furthermore, you can also afford to forgo your investment. You also need patience, because it can take a very long time for your Bitcoin to grow in value.
Trading Bitcoin has a higher risk than investing. However, if you’re successful in trading, it can be a quite lucrative means. The idea behind Bitcoin trading is to purchase Bitcoin at a low price, and sell it later at a higher price. That way, you make some profit.
Trading is only advisable for people who have the knowledge and experience of the market. But, at the same time the risk of losing money is too high.
You can get high returns from the Bitcoin lending process. Although, again, it comes with a very high level of risk.
On platforms such as Unchained Capital, Bitbond, or BTCpop, you can borrow your Bitcoin from another person at an interest rate of up to 15%.
The main risk is that the borrower doesn’t pay you back, meaning you’ll have lost the entire loan amount.
If you want to invest your money in bitcoin, you will have to start by taking the first step to create a bitcoin wallet, purchase bitcoin. You can either be buying and selling bitcoin on bitcoin exchange or any other cryptocurrency exchange/trade platform.
Get your cryptocurrency; bitcoin and digital wallet by getting or creating an account on a bitcoin / cryptocurrency peer to peer platform. Build your personal finance and become one of the blockchain technology investor.
Purchase bitcoin easily through your bank account, credit/debit card, or bitcoin atm. Keep your bitcoin private key safe, and start investing in bitcoin. For the most secure and profitable bitcoin investment, visit – www.tranzactfxinvest.com