The number of people that invest in Bitcoin is constantly growing and it is easy to understand why since you can make a lot of money. However, learning how to invest in Bitcoin is not an easy thing to do. This is different than with other options people regularly think about, like stocks or real estate.
Basically, investing in Bitcoin means buying bitcoin. You can then hold it, trade it or use it for whatever purpose you might have.
Why Invest In Bitcoin?
Everything starts with this question. Just one bitcoin can be worth an unlimited amount of money. Cryptocurrency is valuable because of various reasons. When referring strictly to Bitcoin, the main reasons are:
- Bitcoins Are Useful And Scarce
Bitcoins are often compared to gold because they are similar in terms of scarcity. The gold amount available in the world is limited. So is the number of bitcoins that exist and will exist. No matter what others will tell you, there will just be 21 million bitcoins mined. As time passes, getting bitcoins is harder and harder.
Besides scarcity, bitcoins are also really useful. The big advantage is that you gain access to a predictable and sound monetary policy. Anyone can verify it. Basically, you see as a bitcoin is created and you always know how many exist. You can send bitcoins from any part of the world to any part of the world. There is no bank that will be able to block your payment or even close your account. We thus have access to a huge global potential, making it a really good idea to invest.
How Is Bitcoin Price Calculated?
What you might not know is there is no official price for Bitcoin. The price is set by the amount that people want to pay for it. We already talked about the main price influencing factors crypto investors should know. Read the guide here.
When Should You Buy Bitcoin?
It is really hard to answer this question. You need to monitor the market and learn a lot in order to be truly successful. Nothing is for sure with Bitcoin investing. If we are to look at history, the value of Bitcoin constantly increased. We basically saw really fast value increases, followed by steady, slow downfall until everything stabilizes. Practically, after value stabilizes it is a good time to buy but once again, nothing is for sure.
Bitcoin is truly global so it will not be truly affected by the stability or financial situation of just one country. This is the big difference when compared with regular currencies. Always consider the global scale as you try to figure out future Bitcoin price evolution.
Securing Your Bitcoins
Bitcoin is clearly really valuable. Because of this, scammers, thieves and hackers will want to trick you out of your bitcoins. Securing cryptocurrency is always necessary.
Every single person out there that is serious about Bitcoin investments and that wants to buy a large amount has to use serious, modern Bitcoin wallets built only with security in mind. The two common and popular examples are:
- Ledger Nano S – This is a very good security option offered by Ledger, a company that is specialized in Bitcoin security. Many secure storage devices are available, with this one being widely recommended as among the best and most secure.
- TREZOR – This hardware wallet was built especially to store and secure your bitcoins. However, it can now also be used for other cryptocurrencies.
Whenever you own a large amount of bitcoins, they need to be kept in a wallet you fully control. Remember that when you leave gold coins with friends, they can run off with them. We are talking about Bitcoin and the online world. It is much easier to steal and with cryptocurrencies it is hard to trace a theft. Always secure your investments.
Investing In Bitcoin Mining
When Bitcoin first appeared it was easy to mine. However, the entire industry grew at a huge pace. Mining can still be done on your home computer but it is not profitable anymore. Only specialized data centers can make money mining bitcoins. In order to start a mining operation that is profitable you have to invest millions of dollars.
Conclusions
Before you invest in anything, including Bitcoin, you have to understand how everything works. We are still looking at a rather new industry, no matter how much publicity it recently got. Take the time you need to understand Bitcoin, how it works, how bitcoins can be secured and the difference between Bitcoin and fiat currency.
Don’t forget to read the other guides for investors we have here.
