Investing in Bitcoin
Bitcoin was the first digital currency. The idea behind its inception in 2009 was to replace fiat currencies, which is the money governments issue and support, such as the US dollar.
Today, it’s possible to use Bitcoin in many online transactions, including at gaming houses. For someone interested in using the currency in online gaming, a convenient way to start would be to choose a portal that offers bonuses. For instance, sites that offer 25 free spins no deposit uk to try the games without paying a fee before deciding to register.
Although the digital monetary unit is not the only medium of exchange, it’s still a trending investment asset among investors. This claim is evident by seeing its price growth in the past decade. In 2013, it was possible buy a unit for less than $70. In March 2021, it briefly went up to $60,000.
Should someone get in the market and invest in Bitcoin?
The decision will depend on the level of risk someone can handle. Here is a list of different investment methods that can be adopted and also ways to identify the potential dangers that come with them.
There are multiple ways to invest in Bitcoin today:
Using trading apps such as Coinbase to buy a coin or a fraction of it. It’s necessary to set up an account and deposit money for a purchase.
Just like with trading in stocks, it’s possible to monitor Bitcoin’s price and decide to buy or sell. Keep the coins owned in an exclusive digital wallet.
Although this system is secure, the risk is that access to the funds will be lost if the password is forgotten.
When investing in the exchange-traded fund (ETF), it’ll provide Bitcoin’s price, but the investment will not be directly in the cryptocurrency.
Currently, the Securities and Exchange Commission (SEC) does not allow any Bitcoin ETFs in the United States, but it’s possible to find them in Europe and Canada. When they get approval to operate in the US, Americans can conveniently and safely invest in the digital currency. For instance, Invesco Elwood Global Blockchain UCITS ETF is listed on the London Stock Exchange.
Other ways to get Bitcoin
It’s also possible to acquire the currency through the following:
- Bitcoin ATMs: There are currently over 230 Bitcoin ATMs in the UK.
- Peer-to-peer purchases: It’s possible to buy the cryptocurrency directly from other owners using tools like Bisq and Bitquick.
- Bitcoin mining: Many people earn coins through a process called mining. However, it requires some level of technical expertise and computer costs. This requirement makes it difficult for most users.
Understand the pros and cons
As in investing in stocks, it’s essential to know the benefits and disadvantages of putting money into Bitcoin.
- Transfer anytime: Unlike traditional banking processes, which can take days, it’s possible to send cryptocurrencies to anyone, 24/7. It means also saving on expensive fees.
- Transactions are private and secure: There’s no risk of identity theft because there’s no disclosure of personal information when conducting a transaction.
- High-growth potential: Many investors who put their money into Bitcoin are betting that when there’s trust in the market and more widespread use, its value will skyrocket.
- Decentralised currency: Users prefer digital currencies because they’re outside the control of governments and central banks. The use of cryptocurrencies bypasses the existing financial system. However, note that it’s currently necessary to link a bank account to buy Bitcoin with US dollars.
- High volatility: Bitcoin’s price can fluctuate dramatically. In April 2013, it went from $40 to $140 in a month. 2017 saw the currency’s value surge and plummet throughout the year. It went from $900 in January to an all-time high of $20,000 in December, only to fall to around $6,300 after two months.
- Hacking risks: Supporters say that blockchain technology is more secure than standard electronic funds transfers. However, the currency’s digital wallets have been hacked many times in the past. For instance, in May 2019, the media reported several high-value accounts on the Binance cryptocurrency exchange lost more than $40 million in Bitcoin to hackers.
- Limited use currently: There isn’t widespread acceptance of virtual currencies by businesses at the moment. But this scenario is changing as seen with telecommunications giant AT&T joining Dish Network, Microsoft, and Overstock.com by accepting Bitcoin in transactions.
- No insurance protection: If a brokerage fails, the Securities Investor Protection Corporation (SIPC) will compensate investors up to $500,000. Unfortunately, there’s no insurance cover for cryptocurrencies.
After knowing how and where to start investing in Bitcoin, it’s important heed experts’ advice. It’s key not to put all the money into the cryptocurrency, same as with putting money into a single stock. As a prudent investor, be sure to diversify the portfolio to spread the risk.
The editorial unit