There is a big number of ways to invest in Bitcoin currency. With the growing popularity of Bitcoin, it is very easy to become a Bitcoin investor and have personal investor accounts on various platforms. The cryptocurrency market seems to be something risky and complex for new users. However, this is not actually true if you follow simple rules, want to invest, and know at least basic methods of investing in cryptocurrency.
Table of Contents
If you are willing to find more information on this topic keep reading this article. Have a look at the themes we will cover below and what you will learn:
- Brief Information About How to Invest in Bitcoin;
- Huge Amounts of Bitcoin Investing;
- Buying & Holding;
- Bitcoin Trading;
- Bitcoin Mining;
- Investing in Bitcoin Doublers, HYIPs, and Developing Your Bitcoins;
Brief Information About How to Invest in Bitcoin
The strategy of buying Bitcoin and selling it with subsequent profit does not differ from the process of buying and selling on promotional and other markets. An investor buys Bitcoin cheap and tries to sell it for more expensive earning on the difference in the exchange rate. Unfortunately, the cryptocurrency market is very volatile, and it is difficult to predict when the price falls and rises so investing in Bitcoin is always a very high-risk investment.
The most basic and profitable ways of investing in Bitcoin are:
- Derivative trading;
- The so-called Hodling (or buying and holding cryptocurrency);
- BTC ETF’s.
Buying and holding Bitcoin and other cryptocurrencies in your personal wallet is the safest way of crypto investment.
Huge Amounts of Bitcoin Investing
Inexperienced users with a legitimate interest can make a lot of mistakes when starting to work with cryptocurrency. For example, they can make a choice to make a cryptocurrency exchange on the services where it is risky to store funds or specify the wrong address when transferring digital assets. Each of these and many other mistakes can lead to a partial or complete loss of the invested funds. We highly recommend you to understand one thing from the start: Bitcoin is a very volatile asset class. All Bitcoin investors should remember that. After 10 years of existence, it continues to change greatly and even the most impressive investments in standalone Bitcoin and other cryptocurrencies remain high-risk investments.
A few years ago, within a few months, the Bitcoin value fell by almost 80% and this already happened several times in the history of this cryptocurrency.
A crypto coin is not a company stock or a bond, it is a currency. If you still do not know what Bitcoin is, you will need to watch our introductory video. Bitcoin is a currency so the main method of investing is to buy crypto itself. There are other methods that we will cover later in the article. Try the greyscale’s Bitcoin investment trust.
Why is Bitcoin worth investing in? Because its popularity is growing, and Bitcoin is used in many areas of Internet marketing and businesses. For example, some people had invested only 10 dollars and bought Bitcoin in 2011. After that they were able to get about two million dollars because the rate of Bitcoin increased dramatically.
Buying & Holding
Differences Between Hot and Cold Wallets
First of all, a user needs to start working with cryptocurrency and decide on their strategy and make a good investment portfolio. It depends on where the trader will store their volatile asset. If they prefer to buy Bitcoin and forget about this purchase for a long time it will be safer to keep them on a cold wallet with personal data saved. If a user wants to try trading digital currency it will be better to choose cryptocurrency exchanges that can be put on hot wallets service by providers and it is possible to make financial services.
Both methods have both advantages and disadvantages for Bitcoin owners. For example, you can quickly sell coins with the hot wallet, conduct fast Bitcoin transactions, conduct a Bitcoin exchange and receive other digital currencies, or withdraw them to fiat money. This method of trading is quite convenient taking into consideration a sharply changing course. As soon as the Bitcoin values begin to fall you can quickly convert your coins into dollars or euros. In this case, a cold wallet is less convenient. You will also need to pay transaction fees. However, this way is more secure because crypto exchanges can be easily hacked.
Also, there is a hot wallet that has a direct internet connection, unlike the previous version, but can also be vulnerable to attacks. But a hot wallet has a great choice of buying crypto coins. Only you decide which method to choose to buy Bitcoin and hold it. At least you should know some rulers, regulations, and the blockchain technologies.
Hodling Rules and IRA Investing
Bitcoin value has been declared inactive on the Bitcoin market more than 380 times, but Bitcoin’s trading has been profitable for 4443 days out of a total of 4465 days, which is more than 99 percent. You can have a look at those 22 unprofitable days.
The most common method of investing is Hodling-buying cryptocurrency, with the expectation of increasing the value of one Bitcoin (the origin of the term here).
The most important rule of Hodling is not to listen to other people’s advice on how to trade Bitcoin, make your own market research, look at some information about the cryptocurrency and make your own conclusions.
We have collected some tips for change and purchase Bitcoin:
- Since coins are a very risky investment so never invest more than you can lose. Always remember this rule;
- After buying Bitcoin, put it in your own wallet. It is better to use an encrypted wallet and not to leave your assets on the exchange. Moreover, do not forget your Bitcoin wallet address. When investing large amounts, we advise you to use a hardware wallet. The hardware wallet might be safer than your own wallet. But if you can’t afford it try a paper wallet. We can ensure you that there is no reason to be afraid of digital wallets, they are completely safe;
- Use only proven exchanges. It is worth paying extra money to get additional support and security;
- The DCA method is the dollar value averaging. This means that you do not invest all your money in Bitcoin, but rather buy some cryptocurrency in a fixed time period of a month or even a year, thus averaging the price.
The US citizens have a great opportunity to invest in the IRA. Bitcoin IRA is a tax-free investment account in which you can put your money to purchase Bitcoins or other digital coins. It will help you increase your pension because you will not be able to withdraw money without a fine until you reach retirement age.
Trading is different from buying and holding. In this case you actively purchase Bitcoins and sell at a higher price in a short period. You can earn money and lose a lot at the same time which is common among retail investors.
To try trading you need to have a lot of experience and practical knowledge (it is better to finish an educational financial institution). Because the market is occupied by major players that have been around for ages with a huge bank account, and they are waiting for young hot newcomers to make mistakes. With this strategy, you only make older traders richer. We also do not recommend using the Bitcoin bubble system, which predicts Bitcoin jumps. We cannot be sure how safe the system is. Likely, this might be a fraud.
Due to the high popularity of mining, it is profitable to be a part of Bitcoin miners only by working on a large scale. This means that you need to commit capital on some expensive mining equipment, have unlimited access to free electricity, know about blockchain technology, and be able to actively scan device characteristics. According to our experience, it can be more profitable to buy Bitcoin with this money and not to try getting into the mining sphere.
Most likely, you have seen web pages where you are offered to mine through the Internet, giving a certain amount per month.
After spending a long time researching these sites, we can draw two conclusions:
- There are such pages that are not based on fraud or cheating, but they are rather an extremely long0lasting and bad way of investment. You can get more Bitcoins by investing in cryptocurrency instead of paying for their services (for example, Hashflare or Genesis Mining);
- There also are ordinary scammers who will take the whole sum that you have invested. In this case, you will be left with empty pockets while they will be happy to spend your money.
If you want to see the whole comprehensive review on cloud mining, click here.
Investing in Bitcoin Doublers, HYIPs, and Developing Your Bitcoins
Have you ever seen a company or website that promises you to double your fortune and cash earnings with Bitcoin just in two clicks, to give you insane daily interest on your bank account, or to help you invest in a dubious scheme? Such sites can be classified as scam sites or HYIPs (high-yield investment programs). Their system of work is quite simple: they take money from inexperienced traders, promise them too many unrealistic things, then they simply pay income to experienced users from new registrations and make hype around their company.
Such sites have their own additional referral program that creates additional noise. It works like this: the site gives you a link to share it with your friends, after your friend has invested their money on the site you will receive a small percentage from it. The more people you invite, the more money you receive. Sounds good, but usually, all these easy earnings last for 3-4 months only until the site is closed. Users will not be sent the money they deserve and will be angry because of the wasted invested money.
Over the years, we have covered many Bitcoin investment sites (Bitconnect, USI Tech, and others) in our articles and still have not found a site that is legal and secure for your investment. People or companies offering you something overly enticing are most likely to be scams under a good mask to take away your funds and time. If you want to check the site and find out how secure it is you can use a test tool to detect scammers. One piece of advice that we want to give you is to never use sites that talk about Bitcoin doubling or daily percentages.
Is Bitcoin a good investment?
To answer this question we can have a look at previous Bitcoin prices. In October 2009, Finnish developer Marti Malmi who also worked on Bitcoin development with Satoshi sold 5,050 bitcoins for only 5.02 dollars. Consequently, the value for one Bitcoin was 0.0009 dollars. You can tell that the price for Bitcoin increased drastically. Concerning this, if you look for something to invest in for a long time period you should consider Bitcoin.
Can I invest $100 in Bitcoin?
When making your first steps in cryptocurrency investing it is reasonable to start from small purchases and trades. Actually, you can invest a very little sum just to try how it works. For instance, investing 100 dollars is possible. You might be scared when looking at the current Bitcoin price (approximately 39 thousand dollars). Do not think that you cannot afford purchasing Bitcoin at all. A great opportunity for beginners is buying fractions. You can purchase as many as you can until the sum will reach 100 dollars and puy with your credit card.
When to buy and sell Bitcoin?
The main thing to understand about Bitcoin investment is that you should buy low and sell high. It does not even matter what particular method of investing you have chosen. To earn the most amount of money you need to follow this golden rule. Be sure: this a fundamental idea that every investor writes in their mind. If you apply market research to some future actions you will see that the best time to buy Bitcoins is the moment when the Bitcoin’s price has gone down dramatically. However,how to track when changes are coming? To predict further tendencies in Bitcoin trading you should study the many fluctuations and know how much Bitcoin costs in advance. Only this way you will be able to choose the perfect time to make a purchase from other Bitcoin owners or to sell cryptocurrency.
How to get started with Bitcoin?
We recommend starting with self-education (for example, we suggest seeing our 7-day crash video course). Learn more about the chosen cryptocurrency, its changes, what affects its changes, pros and cons, and so on. After you have become more confident in this field and have received some basic knowledge, it is time for you to decide which method to choose to earn money on cryptocurrency.
Once you get started, start from small trades and learn as you go along. Do not be afraid of learning from your mistakes because it is the only way to get a great experience in the cryptocurrency field. All experienced traders started from this point, too. There is nothing wrong with consulting and drawing conclusions from the experience of others and reading information on the Internet, but do not follow all pieces of advice blindly. Moreover, always be careful when sharing any personal information and precise geolocation data.
How can I make Bitcoin cash?
In addition to the methods that I mentioned in this article, there is also an opportunity to earn money using:
- Signature campaigns;
- Bitcoin-related services;
- Writing articles about Bitcoin;
- Bitcoin faucet owning;
- Affiliate programs;
- Micro Earnings;
- Micro Earnings;
- Lending of Bitcoin;
- Bitcoin forks;
- Owning Bitcoin ATMs.
Even more ways to earn money on cryptocurrency are described here.
Can I convert Bitcoin to cash?
Naturally, Bitcoin or other cryptocurrencies can be converted to fiat currencies. You only need a cryptocurrency exchange account and a bank account. There are some exchange services suitable for Bitcoin owners. You can find people willing to buy cryptocurrency for cash and not using a credit card on Paxful or HodlHodl. We have also reviewed many of these services for you to find the most convenient and safest one to use. When selling Bitcoins for cash especially choose a buyer carefully not to lose all your cryptocurrency and receive no money back.