Bitcoin is by far the most well-known cryptocurrency and one of the most trending forms of investment. But considering its volatility, crypto investors might wonder: is it safe to invest in Bitcoin?
Understanding Bitcoin
The first person who implemented blockchain was an unknown man (or group) called Satoshi Nakamoto. The project received worldwide recognition, and today, almost everyone knows about Bitcoin.
Bitcoin is operating on a decentralized system. That is why it’s supposed to be a “safe” asset. What does decentralization do to a digital asset? The decentralized network doesn’t let any authority or organization fully control its transactions. Hence, transparency and proof of authenticity are central to Bitcoin transactions.
Why Bitcoin Is So Popular?
Before investing, it’s right to ask yourself a question: Is Bitcoin reliable?
There are some good reasons why Bitcoin and many other crypto coins are gaining popularity day by day. Perhaps these reasons are a testament to how cryptocurrencies can benefit us.
The very first reason is of course anonymity. You can transfer coins anonymously to any corner of the world. And the charges for these transactions will be minimal.
The second is that BTC and a bulk of other thriving crypto coins are faster than fiat currencies. Moreover, this is a good cause to use them frequently.
The third goal for BTC’s popularity is stability. This may seem contradictory because many of us have seen the volatility of Bitcoin’s value. The truth is that it isn’t a subject to hyperinflation, which gives comparable stability to the coin.
The fourth is the safety of storing and transacting Bitcoin. Cryptography and blockchain run seamlessly together to maintain an exceptionally secure coin.
And last but not least, we should also mention the lasting power of Bitcoin. Many cryptocurrencies have come and gone over the years. Bitcoin, on the other hand, has proven its reliability by existing for already 11 years.
Alternatively, people are considering BTC as a means of currency when the political or economic situation in their country is unstable. Two examples of this case have taken place lately.
The first is in Argentina, where the situation with peso became so uncertain that many people started to invest in Bitcoin. This has seen Bitcoin’s price grow within the region.
The second is happening in Hong Kong. The political situation has encouraged people to hold on to Bitcoin.
So, this case is proving that Bitcoin has become a reliable asset of investments and a lifebuoy in extreme situations.
Methods Of Investing In Bitcoin
The process of investing in Bitcoin is the same as with physical currency. A wallet is required to store your digital currency. To be able to keep the coins that you are going to obtain, a crypto wallet is needed.
The second point is to find an exchange, which supports the coin you’re investing in. The case of Bitcoin is simpler because most crypto exchanges support BTC. Create an account on the exchange and buy some Bitcoins. Congrats! You’re a BTC investor now.
There’s also an alternative means of obtaining Bitcoin, and it’s known as mining.
The network validates all transactions. If everything is accurate, it adds a new block to the chain. Miners are the ones who are responsible for this. They’re connected to the blockchain and have to solve cryptographic puzzles to verify transactions. At its inception, every simple PC in the world has enough computing power to solve these puzzles. Today, these mathematical puzzles are so hard that you must own very powerful computers to cope with them. So, it’s becoming obvious that this model of Bitcoin investments is pretty hard and expensive, given that the amount spent on electricity is likely to outweigh the value of Bitcoin mined.
Legal Sides Of Owning BTC
The majority of people avoid transacting in Bitcoin because they believe it’s illegal. But the truth is that owning Bitcoin is legal in most countries.
So, feel free to buy Bitcoins and take your investments to the next level.
Selling Bitcoins And Turning A Profit
For greater revenue, it’s simpler to hold your coins until the price increases so you can sell them. But if the time has come and you need to trade your Bitcoins, you’ll need to know the methods of selling the currency.
Open an exchange account. Coinbase is the most popular and reliable exchange nowadays. However, you can choose any if you wish to. Link your crypto wallet and bank account to the exchange. Now you’ll be able to swap your Bitcoins into fiat currencies, and you can get them in your bank account.
Place a sell order in the exchange. This is also an easy method. Just choose the amount you want to trade and place the order. The good point in this method is that you can place a “limit” order. It means that your coins will be sold as soon as the value of Bitcoin hits the value that you have set.
Many modern billionaires are also crypto enthusiasts who are in love with investing in BTC. For instance, Bill Miller announced that Bitcoin’s price growth in 2019 netted him a tidy profit of 46%.
There are lots of Bitcoin trading strategies that are applied by advanced investors, who have gained a lot of money through these methods.
Try to spare some time for learning news about the currency you’re going to invest in. If you have already purchased some coins, wait until they grow in price, and then sell them. Remember to always track changes that happen with the crypto. And, finally, do your research before putting your money in any project, even if it’s a reliable currency like Bitcoin.
