Bitcoin is a virtual or digital currency that you can exchange, buy or sell directly without an intermediary. Bitcoin is not only the first crypto, but it is also the best one of over 5000 cryptos in existence at present. Financial media covers every new decline and high, making Bitcoin an unavoidable part of the crypto landscape. While its wild volatility may generate headlines, it barely makes Bitcoin an excellent option for people in need of a steady store of value and novice investors. Understanding Bitcoin can be a little tricky – so, let us take a close look at why and how to invest in Bitcoin.
Why Invest in Bitcoin?
Bitcoin is known to be the first digitally native and fully functional cryptocurrency around the world. With Bitcoin, a new asset class was born. But why is everybody ready to purchase a piece of this rare digitally coded crypto? Let’s find out:
A Hedge to Inflation
Inflation is known as an economy-wide rise in the rates of services and goods over time. Inflation can reduce the buying power of money. Initially, Bitcoin was designed to be a deflationary asset. Bitcoin halving and Bitcoin’s limited supply are a catalyst against inflation. Over the years, Bitcoin has become a better alternative to gold.
Top-Performing and High Return Asset
Cryptos have become the fastest-growing asset class. Bitcoin holds nearly 70% of the market share when it comes to cryptocurrencies. Bitcoin’s price is highly volatile. So, its price may go up and down every hour. This volatility is beneficial for the risk-friendly traders and investors who want to make high and fast returns from their investment.
What Do You Need to Invest in Bitcoin?
You need a few documents and information to invest in Bitcoin. They include:
- Your bank account information
- Your personal identity documents
- An internet connection
How to Invest in Bitcoin?
Below is a step-by-step guide on how you can invest in Bitcoin:
Join An Exchange: You will first have to find out where you can buy Bitcoins. You can use a cryptocurrency exchange to buy Bitcoins. There are many popular options easily available online.
Get a Wallet: If you buy a coin, it will be stored in a crypto wallet. You can either get a cold wallet or a hot wallet. Cold wallets are the safety storage form for your coins. But, hot wallets aren’t the safest kind of coin storage. They are either operated by a provider or a crypto exchange. If the provider gets hacked, your coin information can be at risk.
Those looking to trade a large number of coins should go with a cold wallet. While those going to buy a small amount can use a hot wallet.
Connect the Wallet to Your Bank Account: Once you get your wallet, you should link it with your bank account. You can also link the bank account with your crypto exchange account.
Place A Bitcoin Order: You have now done everything needed to buy a Bitcoin. You can now place an order to buy a Bitcoin. The cryptocurrency exchange lets you buy a fraction of a Bitcoin. So, you can begin with a minimum of $25.
Different Ways to Invest in Bitcoin
Over the years, many ways have popped up to invest in this first digital currency. Let’s learn the different ways to invest in Bitcoin:
Buying Standalone Bitcoin: One of the best ways to invest in Bitcoin is by buying a coin or just a fraction of the coin through trading apps. You will have to create an account by offering your personal information and depositing money to buy Bitcoins. You will then get access to price performance and options to sell/buy Bitcoins. If you buy Bitcoins, they will be kept safely in a wallet that only you can access.
Amplify Transformational Data Sharing ETF – BLOK: This is a dynamically managed fund with holdings in 15 industries. It can be traded on the NYSE. This company invests in many other countries that are creating blockchain technologies.
Grayscale Bitcoin Investment Trust (GBTC): Those who want to invest in Bitcoins via the capital market can access investments via Grayscale Bitcoin Investment trust. Grayscale offers many benefits that make Bitcoin investment a digestible option. GBTC shares can be held in many Roth IRAs, IRAs, and other investor and brokerage accounts. It gives simple access to investors of every level.
Bitwise 10 Private Index Fund: It depends on the Large Cap Crypto Index of Bitwise 10, a basket of big-capacity coins. Here, the company attempts to offer ease of use and security of traditional ETFs. These assets are held offline in cold storage and offering needed securities for the investors.
Is Bitcoin a Good Investment?
Answering this question is a bit challenging since no investment is really “bad” or “good.” It entirely depends on your investment strategy, your financial goals, and your risk tolerance. If you are thinking of investing in Bitcoin, you should consider your goals and find out what you wish to attain by investing in Bitcoin. Do you want to become a full-time crypto investor? Are you looking to make a passive income, and do you want to save for your retirement? Answering such questions will help you find out whether Bitcoin is a good investment for you or not.
Since Bitcoin is a highly volatile asset, it is a high-risk investment. The value of Bitcoin can dramatically rise or fall in a short period – within hours or days. Bitcoin prices entirely depend on its market demand. If more people are purchasing Bitcoin, its value will increase. However, it will decrease if there is less demand for it. You should time the market properly to make noteworthy profits on Bitcoin. So, we can say that there is a potential for making profits with Bitcoin. You can also make profit from Bitcoin but for that you need to choose Bitcoin Future platform. It is an automated trading platform that helps you to make good money from Bitcoin. Check out experts’ reviews to know more further about this unique platform.
Bitcoin is the most popular cryptocurrency that uses a chain of interlinked computers to protect and store your digital assets. Being prone to fast and large swings in value, Bitcoin is highly volatile. It offers a chance for higher returns but poses a high risk as well. You must not invest more than what you can lose. Since it is a high-risk investment, it should represent only a smaller segment of your portfolio.
If you want to invest in Bitcoin, now you have many options. Purchasing Bitcoin via an exchange can subject you to volatility. However, going for an ETF or a trust investing in cryptocurrency-tech companies can reduce your risks that you would face while buying coins.
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