How to Invest in Bitcoin?
How To Invest In Bitcoin
Bitcoin cryptocurrency has existed for more than ten years, and during this time it attracted the attention of many investors, including traders with significant financial opportunities. Investing in Bitcoin is, first of all, an opportunity to invest in a fairly reliable and in demand currency. Investors who are self-sufficient and do not dispose of their funds during periods of short-term decline in demand for Bitcoin receive a good profit.
Compared to investments in traditional currencies, even minimum Bitcoin investments give a greater chance of getting profit. It is explained by its unique property, namely, that the price of Bitcoin is determined by the desire of people to pay certain money for it. And, since the total amount of Bitcoins in the world is predetermined, the longer this cryptocurrency exists, the higher its demand and the higher its price will be.
Bitcoin is the world's first mass digital cryptocurrency, and it still remains the most popular. Today, thousands of merchants around the world accept this currency as a payment for their goods or services. Bitcoins can also be exchanged for regular money using specialized exchanges or trading platforms.
A key feature of Bitcoin is a limited supply that protects the currency from inflation. Bitcoin’s emission is decentralized as the release of new Bitcoins is carried out by people from all over the world using the computing power of personal computers. There is no single centre for issuing this cryptocurrency. There is also no fee for carrying out Bitcoin transactions.
The undouble advantage of this cryptocurrency is its anonymity. All that an investor can see is the address of the wallet to which funds will be transferred. Similarly, the investor is not required to provide any information about himself. However, the true anonymity of Bitcoin platform is disputed by many people in the crypto community. But it’s still a more anonymous option that your fiat investments, at least on the surface.
The total number of Bitcoins in the world is limited to 21 million, while the new Bitcoins mining rate decreases every 4 years approximately by half. Therefore, over time, the creation of new coins is becoming slower and slower and more resource-hungry, and, therefore, the Bitcoin price is predicted to grow. With regard to investing, this means that Bitcoin will show a long-term price increase and over time will be able to bring good profits.
This article is determined to help you to answer such questions as “How do I invest in Bitcoin?”, “How to invest in Bitcoin in 2019?”, etc. Should you invest in Bitcoin in 2019 we will be here to give you advice.
Best Way To Invest In Bitcoin
There are two main and most common strategies for investing in Bitcoin. We wouldn’t be able to tell you the best way to invest in Bitcoin as it strongly depends on your recourses, knowledge and desires.
One strategy is the positional strategy. Everything is quite simple here. The investor acquires a certain amount of bitcoins for fiat money and waits for the growth spurt of the cryptocurrency. Sooner or later, the cost of Bitcoin will increase, and the purchased cryptocurrency can be sold several times as expensive as it was bought. It is important not to give up ahead of time, noticing a short-term fall in the price. This Bitcoin investment strategy requires a lot of patience and spare funds.
The next strategy is trading on the stock exchange. The basic principles of cryptocurrency trading are similar to those used on the fiat stocks. Here Bitcoin has one key advantage, namely, lack of truly experienced traders. Not everyone knows the basics of Bitcoin trading on the exchange. Accordingly, an experienced investor will be able to simply bypass their competitors.
Now to the unpleasant part. The risks of investing in Bitcoin are primarily associated with centralisation. This will happen due to the fact that the exchanges where people sell and buy this cryptocurrency are becoming increasingly influential on the Bitcoin rate. In addition, the very Bitcoin mining is gradually concentrating in the hands of a fairly narrow circle of people. They are the owners of the latest technology, which allows extracting new Bitcoins faster.
More and more people prefer not to splurge on expensive equipment for Bitcoin mining, but to mine cheaper cryptocurrencies and exchange them for Bitcoins instead. This trend itself threatens the decentralization of the currency.
Another risk when investing in Bitcoins is related to the fact that all operations with it are open. Therefore, it is possible to predict the attempt at manipulation of Bitcoin price when a large number of coins is bought.
Invest In Bitcoin Mining
One well-known Bitcoin investment strategy is mining. This is the most profitable and at the same time the most difficult investment option. Money is invested not directly in the cryptocurrency itself, but in the equipment that will mine it.
Another not so obvious option is Bitcoin cloud mining. It is easier as it is not necessary to purchase equipment and perform any calculations on your own. It is required only to rent remote facilities which will perform all the tasks automatically. This system is good for all but directly profit. Most of the earnings go to pay rent. On the other hand, in the long run, the rate will grow even more, and if you save all your earnings, it will gradually become more and more expensive. Is bitcoin worth investing in this case? Yes.
To sum it up, if you have spare funds the best option would be to buy some Bitcoins and wait for a higher rate to sell them. The alternative is to purchase equipment and mine coins. If an investor understands trading on a stock exchange, then a buy-sell system is best suited, since it brings a steady profit immediately, and not in the future. When the available funds or knowledge is not enough for either the first or second options, you can rent the power and gradually collect Bitcoins, saving them for future sale.
Bitcoin Investment Sites
There are many platforms and projects that help investors. However, using these services, you are required to have a basic knowledge of how trading and investing work. We are going to point out several projects where you can invest in Bitcoin (or Ethereum and any other currency).
Cloud mining platforms
The bottom line is that the user invests their own money in cloud mining (in other words, he invests in computing power), thereby gaining interest from their contributions. On average, on different cloud mining, you can get from 5 to 15% per month from your own investment. In particular, some services allow you to mine both on your own equipment and receive payments using the acquired contract for third-party capacity.
Mining pools
These services are can be really helpful especially if you chose one with great feature set, like the stock exchange for all cryptocurrencies (both on Scrypt and SHA-256) and cloud mining. So, in addition to earning money directly from investing in cloud mining, you can also purchase third-party capacity, which you can also resell there. Thus, the investor can potentially make a profit with the resale of capacities, and with the interest from mining.
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