Investing in Bitcoin: how, when and where
Investing in Bitcoin is not a complex operation, although it contains more risks than you can imagine a priori. We will explain below how, when and where you can make this investment.
- Many savers and individual investors consider Bitcoin interesting as an investment, whether in the short, medium or long term. The reasons are diverse:
- As any other financial asset, Bitcoin is listed in a market and its investment is possible through buying and selling.
- How to invest in Bitcoin?
- Why invest in Bitcoin?
- In fact, it has several similarities with the yellow metal, so it is interesting to invest in it. Actually, Bitcoin is called "the Type Gold" or "Gold 2.0":
Many savers and individual investors consider Bitcoin interesting as an investment, whether in the short, medium or long term. The reasons are diverse:
It has strong volatility in the markets, which makes it have great potential for short-term profitability (in addition to greater risk).
It is a value reserve. Having Bitcoins is equivalent to having any financial asset. It can be revalued in the long term, given its characteristics. However, it does not offer interest or dividends.
Bitcoin is a digital currency: a crypto currency . It was created in 2009 by Satoshi Nakamoto. Its goal was to create a payment system parallel to the traditional one. Without the intervention of any central bank or government.
It is not the only cryptomeda that exists, but it is the oldest and has the most weight in the market (the largest by market capitalization, as well as the most popular). The fluctuations in its price mark the general trend.
As any other financial asset, Bitcoin is listed in a market and its investment is possible through buying and selling.
There are different reasons to invest in Bitcoin. Just as there are several mechanisms or alternatives. If you want to know how to start designing your strategy and choose the means that best fits your objectives.
How to invest in Bitcoin?
Investing in Bitcoin has become a popular activity thanks to the great acceptance it has had since its beginning. The amount has been given as a means of payment and as a deposit currency.
It is possible to have Bitcoins stored in a platform that acts as a digital wallet . The transactions are carried out through a consensual network, in which users unanimously confirm when a transfer operation is legitimate. This is how Bitcoins exchanges occur.
In other words, it is a kind of public accounting (despite the anonymity of the two users who exchange Bitcoins). Nobody controls the network. And nobody can change this accounting without the consent of the other participants, avoiding fraud. This technology is called "Blockchain".
Blockchain is the technology that supports Bitcoin and most of the cryptomains that exist. It is a decentralized peer-to-peer (P2P) network. Any user can send and receive Bitcoins in a totally anonymous way.
On the other hand, many cryptomachs, led by Bitcoin, are listed in a market and it is possible to trade them (buy and sell them). The fluctuations in its price make it attractive for short term investments (i.e. trading with Bitcoin).
Moreover, one of the greatest attractions of investing in Bitcoin is its ability to reevaluate itself in the market.
In short, investing in Bitcoin is to obtain these assets, by legitimate means, and sell them when they have appreciated in the market. It is the way to obtain a return on this type of investment.
At the same time, it can be used as a means of payment, but it is beyond what the investment would be (it would be using it for its main purpose).
Why invest in Bitcoin?
A unique feature of Bitcoin is that there are only 21 million of this currency. Because it is a limited asset, it is valued. With this, we can deduce that the supply is limited; but not its demand (at the moment). It can be compared to gold.
In fact, it has several similarities with the yellow metal, so it is interesting to invest in it. Actually, Bitcoin is called "the Type Gold" or "Gold 2.0":
It is durable.
It is immune to inflation.
It's hard to pretend.
It's accepted as a means of payment.
This explains why many investors turn their eyes (and their capital) to this asset. Besides, the cryptomoedas present a series of advantages for the investor:
They have great liquidity: it is possible to exchange it for cash simply and quickly, without having to change its price to sell it. Bitcoin is one of the most liquid cryptomaps.
They have great volatility: having the ability to fluctuate prices in the market makes them a source of opportunities to obtain profitability (although it also substantially increases risk).
They are not subject to any kind of government policy: the only thing that changes their price in the market is supply and demand. They do not depend on any decision about interest rates, taxation, etc. It is a decentralized investment, there is no institution that controls Bitcoin.
Cryptomains have great capacity to become the reference currency of the future; a reserve of value in digital format. That is why your investment is interesting.