All You Need to Know about Investing in Bitcoin

SHARE THIS

FACEBOOK

  DELICIOUS

  SU

  REDDIT

Bitcoin has captured the imagination of the world. It is not yet clear whether or not investing in Bitcoin is just a passing fad or something that everyone should consider. What is known, however, is that bitcoin prices have been incredibly volatile as of late, while at the same time becoming increasingly valuable with some people having made millions through it.

Is Investing in Bitcoin a Good Idea?

This is the question that everybody wants to answer. The reality is that bitcoin is highly speculative in nature, which means it is also very risky. If you want to know whether or not it is smart to invest in Bitcoin, you will be able to find highly respected experts in the field of investment who will either tell you that it is the smartest thing you will ever do, or the stupidest thing you will ever do. As such, it is about accepting that it is risky and understanding your own personal risk tolerance. That is what will determine whether or not investing in Bitcoin is a good idea.

How Investing in Bitcoin Works

If you have calculated your risk tolerance and you have decided that you want to have a go at it, you’ll have to first get to know what bitcoin actually is. It is a type of cryptocurrency that exist in a decentralised, unregulated digital world. No Central Bank or government is involved in it, which means that they cannot influence its value, but it also means that they cannot protect it’s owners. For many, the fact that it is decentralized is precisely what makes cryptocurrency so appealing and they feel that the lack of protection from a government is in no way a disadvantage. However, because it is decentralized, it also means that standard brokerage account and other investing tools cannot be used for these purchases.

However, that does not mean you cannot invest in Bitcoin at all. In fact, you can invest in tiny pieces of Bitcoin. That is because there is a finnart amount of Bitcoin in the world and most of it has now been found. As a result, a single Bitcoin is worth approximately $10,000 right now. Do be aware of the fact that by the end of 2017, it was worth nearly $20,000. This shows the extreme volatility in the currency. However, you can purchase bitcoin down to 4 decimal places. This means that, for around a dollar, you can invest in a piece of Bitcoin.

If you wish to invest in cryptocurrency, the first thing you will need is a wallet. There are numerous highly respected websites that offer these wallet and you need to make sure you compare them to find one that offers you the functionality that you need. Many people have multiple wallets so that is also an option. Whether you have a single digital wallet or multiple once, the accounts must all be connected to your personal payment source such as a debit or credit card or bank account. It requires two factor authentication if you want to protect yourself from cyber theft.