The Pros Of Bitcoin Investing
The main benefit to Bitcoin investing is that you may be able to generate a huge return on profit, perhaps as high as 200% or more. Of course, thats a challenging thing to accomplish, but its possible.
If you purchase a large amount of Bitcoin, you may be able to capitalize on a market surge and sell your coins for a much higher value when there are lots of buyers. Theres also a slight possibility that Bitcoin will truly become the currency of the future or a more popularly traded asset, and you could hopefully generate returns from long-term holdings. It should be noted, however, that Bitcoin values are generally decreasing every year.
Your success may depend on properly timing the market. In other words, youll buy coins when theyre at a low price and sell them when theyre at the highest possible price. High-risk investors who pay close attention to the market may be able to generate massive returns when employing that strategy. They might even generate returns that are highly improbable in the world of corporate stocks or government bonds. To that end, Bitcoin is incredibly liquid. According to Shaun Heng, VP of growth and operations at CoinMarketCap, Bitcoin is one of the most liquid investment assets you can have and is more liquid than any other cryptocurrency. As a result, any realized can actually be realized almost immediately.
What Is Bitcoin And How Does It Work
The concept of digital money that people send online is not that complicated in itself. After all, most of us will be familiar with transferring money from one online bank account to another.
Bitcoin is a digital asset that operates like normal currency, but without the banks taking a cut with every transaction.
Unlike normal currency, there is no physical version of the coin.
Each bitcoin is created using an encrypted code, which is a string of numbers and letters. The same equation used to create the code is can unlock it .
Other important points about bitcoin:
- Cryptocurrencies, like bitcoin, are a form of payment that uses blockchain technology to send data in cyberspace
- Each bitcoin must be mined
- It is finite: only 21 million bitcoins that can be mined in total
- Cryptocurrencies are decentralised meaning they are not regulated by a financial authority, like a government or central banks
Find out more: Is cryptocurrency a good investment?
Strategies For Investing In Bitcoin
Despite the many differences between buying Bitcoin and buying other equities like stocks, there are inherent similarities that must be addressed. In fact, the actual strategies for investing in Bitcoin arent all that different from their stock counterparts. That said, many of the strategies for buying Bitcoin have to do more with investment timeframes. In particular, investors may exercise one of the three most popular Bitcoin investment strategies:
Buy and Hodl Bitcoin
Also Check: Can You Buy With Bitcoin
What Cryptocurrency Should You Invest In
First, Blockgeeks does not give financial advice, and second, never asks anyone else what to do with your money, least of all Google! Always educate yourself, understand the risks, the all possible outcomes, and dont make any investments if you are not 100% comfortable with your decision.
That said,;Bitcoin remains the undisputed king of cryptocurrencies its been around the longest and has the largest market capitalization of;over 674 billion USD;.;;is the total value of all tokens available, or the price of each token multiplied by the number of tokens in circulation.
However, there are other cryptocurrencies to choose from, such as;Ethereum,;Cardano, Litecoin, and thousands of others. They all differ in price, availability, demand, transaction speed and fees, and the technology that supports them.
The website;CoinMarketCap;lists over 5,000 options in order of decreasing market capitalization. Here are the top 10 and their performance as of May 2021.
It doesnt matter what the price of a given cryptocurrency is, you can always buy a fraction of a token. For example, if 1 Bitcoin costs $35,000 USD, you can always buy 0.0001 Bitcoin for the equivalent of $350 USD.
When researching tokens to invest in, you can take a look at;CoinMarketCap;to get a snapshot of the top performers, but your research should not stop there. In fact, thats where the real work begins.
Im Going To Show You How To Set Up A Brand New Email Account Using Protonmail
- ProtonMail offers a variety of accounts to choose from; in this guide, we are going to set up the free basic account so click, Select Free Plan.
- Next, choose your unique username that youve never used anywhere else before, generate a strong password, and register a recovery email.
- Make sure the email address you use as a recovery has a strong password as well.
- Then click Create Account.
- Verify that you are a human by CAPTCHA, email, text message, or by making a donation. Finally, click Complete Setup.
Now you can choose your display name and download ProtonMails mobile applications if you like.;
Now you have an encrypted email account to use to set up your cryptocurrency accounts.
Also Check: How To Delete Bitcoin Account
Other Ways To Invest In Crypto
You’ll also have multiple other options to choose from when it comes to buying crypto. In the past year, payment services like PayPal, Cash App, and Venmo all expanded their accepted payment options, allowing you to buy, sell, or hold cryptocurrencies like bitcoin.
In addition, you can throw your hat in the crypto ring by utilizing the following vehicles:
- Bitcoin trusts: You can buy shares of bitcoin trusts with a regular brokerage account. These vehicles essentially give retail investors crypto access through the stock market.;
- Bitcoin mutual funds: Though bitcoin ETFs are still under SEC speculation, two bitcoin mutual funds have launched: The Bitcoin Strategy ProFund and the Cboe Vest Bitcoin Strategy Managed Volatility Fund .;
- Blockchain stocks or ETFs: You can also indirectly invest in crypto through blockchain companies that specialize in the technology component of crypto and crypto transactions. Another option is to buy stocks or ETFs of companies that utilize blockchain technology.
Overall, you’ll have so many options for exposing your portfolio to crypto assets. The best option for you, however, depends on your goals and risk tolerance.
What Are The Fees When Buying Bitcoin
If you want to buy and sell bitcoin, there are usually fees to pay, such as:
- Transaction fees
Investment companies that are showing an interest include:
- The worlds largest asset manager, BlackRock, opened two of its funds to the possibility of investing in bitcoin futures
- UK based Ruffer Investment Management added bitcoin to its multi-asset portfolios before pulling out five months later with a ;$1.1B profit
- In December 2020, one of the worlds biggest index providers, S&P Dow Jones Indices announced it would launch indexing services in 2021 for over 550 of the top traded cryptocurrencies.
The Bank of England and other central banks are exploring the possibility of their own central bank-backed digital currencies.
As more institutional investors get on board with crypto assets for capital gains, this could help to calm dramatic price moves.
Find out more: Guide to investment trends 2021
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Amazon To Accept Bitcoin As Payment
If the rumours are true, the technology company could accept bitcoin payments later this year. This could drive the price of the cryptocurrency upwards.
Amazon is also said to be looking at launching its own cryptocurrency.
This comes after Amazon posted a job advert looking to hire someone to develop its digital currency strategy.
Amazon isnt the only tech giant to be branching into cryptocurrency; there are rumours circulating that Apple will use some of its large cash reserves to invest in bitcoin.
Senior Investment and Markets Analyst, Hargreaves Lansdown
Is Bitcoin Bad For The Environment
The digital currency uses as much power as the Netherlands every year, with just 30 countries using more energy, according to researchers from the University of Cambridge.
Computers that mine bitcoin use up to 1% of the worlds electricity supply.
While some of bitcoins consumption is renewable , fossil fuels are still being used to power the mining and servicing of the digital currency.
This is why electric car manufacturer Tesla has stopped accepting crypto payments, causing bitcoin to fall.
Also Check: Which Crypto Exchange Should I Use
Never Store Passwords In Your Browser Because Those Are Vulnerable As Well
Thats why I recommend ONLY storing your passwords in your paper notebooks.
Remember, never rely on one single password to protect your investments.
You are your own bank, so you need to have more than one line of defense.
Here is a bonus tip:
If any accounts require a security question, treat the answers like your passwords
What Is A Cryptocurrency Etf
A cryptocurrency ETF is just like your standard ETF , but the underlying securities are cryptocurrencies. Similar to regular ETFs, a crypto ETF is supposed to mimic the price of its underlying cryptocurrencies. So the stock price of a Bitcoin ETF should closely follow the price of Bitcoin. .;
Crypto ETFs look like the next evolution in making cryptocurrency more accessible to the broader investor population. GBTC can severely overshoot or undershoot the price of the underlying Bitcoin due to swings in market sentiment. ETFs, on the other hand, are not as constrained by limitations on creating and redeeming shares as trusts are. That means they can better satisfy changes in supply and demand and should do a better job tracking the price of crypto.
The price discrepancy is good to be aware of as an investor. If you are planning on buying and holding, the premium or discount from a stock like GBTC is likely to disappear over time as more competitors show up. If you are holding for a shorter duration, then the price difference doesnt matter as much, presuming its still there when you sell. .;
Ok, now that thats out of the way, lets go into the pros and cons.
Read Also: What Is The Stock Symbol For Bitcoin
Are Cryptocurrencies A Good Investment
Cryptocurrencies may go up in value, but many investors see them as mere speculations, not real investments. The reason? Just like real currencies, cryptocurrencies generate no cash flow, so for you to profit, someone has to pay more for the currency than you did.
Thats whats called the greater fool theory of investment. Contrast that to a well-managed business, which increases its value over time by growing the profitability and cash flow of the operation.
For those who see cryptocurrencies such as bitcoin as the currency of the future, it should be noted that a currency needs stability.
Some notable voices in the investment community have advised would-be investors to steer clear of them. Of particular note, legendary investor Warren Buffett compared Bitcoin to paper checks: It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money?”
» Learn more:;Is Bitcoin safe?
This price volatility creates a conundrum. If bitcoins might be worth a lot more in the future, people are less likely to spend and circulate them today, making them less viable as a currency. Why spend a bitcoin when it could be worth three times the value next year?
Final Thoughts On Bitbuyca
In such a competitive market, can such a modest company attract the interest of your average crypto user? In our opinion, it can. The company does what it advertises: gives you a simple way of exchanging your coins into Canadian dollars, and vice versa.
The organization is caring for their clients, their communication is top-notch, plus their verification process is extremely quick. Bitbuy is also safe and while their fees aren’t anything to write about, they still fall in line with the rest of the market.
If you’re a Canadian crypto user, you should try Bitbuy.ca out.
We hope that you found our review interesting and informative. What’s the best crypto exchange in your opinion? If you have any additional questions about Bitbuy.ca leave a comment in the section below.
About the Author: Jordan Tuwiner
Jordan Tuwiner is the founder of BuyBitcoinWorldwide.com. His work has been featured in The Guardian, International Business Times, Forbes, VentureBeat, CoinDesk and many other top Bitcoin media outlets. His articles are read by millions of people each year looking for the best way to buy Bitcoin and crypto in their country.
He has also written extensively about the history, technology, and business of the crypto world. Jordan is also the creator of some of the internet’s most famous Bitcoin pages, including The Quotable Satoshi and Bitcoin Obituaries.
To learn more about Jordan, see his
Also Check: How To Send Money To Bitcoin Wallet
What Is Cryptocurrency And Should I Invest In It
10 Minute Read | September 22, 2021
Cryptocurrency. Its the hot buzzword of the investing world these days. But what is cryptocurrency really? Ever heard of Bitcoin, Dogecoin, Litecoin, XRP or Ethereum? Nopethey arent embarrassing rock band names from the 90s. Theyre actually types of cryptocurrency . And theyre trending everywhere you look.
But the million-dollar question here is, should you invest in cryptocurrency? Despite what every loudmouth on the internet yells at you from their digital soapbox, buying cryptocurrency isnt a safe bet for your investing future. But well get to that in a minute. Lets unpack what in the world crypto is first.
Investing In Companies With Crypto Interests
Thats how personal finance expert Suze Orman initially did it. She recently told NextAdvisor about how she invested in MicroStrategy, a cloud computing firm that holds billions in Bitcoin, because its CEO was putting all of the companys working capital into Bitcoin. She figured if Bitcoin increased in value, so would the value of Microstrategys stock.
But as anyone who follows Ormans advice knows, she recommends index funds as a much better investment strategy than picking individual stocks.
Rather than buying shares in any single crypto-forward company, its better to maintain a balanced portfolio by identifying companies with crypto interests, and making sure their shares are included in any index or mutual funds you put money into. Not only does that allow you to invest in the companies where you see potential, but it also helps you keep your investments diversified within a broader fund.;
If you invest with Vanguard, for example, you can use the sites holding search to find all the Vanguard funds that include a specific company. Just enter the companys ticker symbol and the tool will offer a list of all the Vanguard products that have holdings of its shares. Other investing platforms offer similar ways to search by company within index and mutual funds.
Don’t Miss: What Is The Next Big Cryptocurrency
Day Trading And Scalping
A crypto day trading strategy allows the trader to take full advantage of cryptocurrency assets price volatility. As mentioned earlier, virtual assets are currently extremely volatile, which works to the advantage of a day trader.
The day trading strategy is a game of numbers strategy. A day trader will make multiple trades within a day, buying low and selling high within little gains that compound to large sums by the end of the day. Typically, sometimes it gets hard to perform this manually. To succeed in this strategy, you will need to consider automating your trades using trading applications or crypto trading bots like Coinrule.
Please note: It is not recommended that you begin your trading journey as a day trader. This is because this strategys fast-paced nature will require that you make fast decisions, and there is little room for research between trades.;
Scalping is a part of day trading but typically involves concise trading periods. Think minutes.
When either day trading or scalping, many trades will result in both wins and losses. The idea is to make sure that the win/loss ratio is in your favor. Score more wins to consider your strategy a success.
Can You Lose All Your Money In Bitcoin
Yes you certainly can.
There are three main ways to lose all you money with bitcoin:
- The value plummetsand you sell: crypto is volatile with its price determined by sentiment. Though technically you only lose money if you sell an investment for less than you bought it for. This is known as crystallising your losses.
- Your memory: experts estimate 20 per cent of all cryptocurrency has either been forgotten about or lost;with a current value of around $140billion, according to Crypto data firm Chainalysis
- Cyber crime: hackers and scammers are thought to steal around $10million worth of cryptocurrency every day, according to Atlas VPN
Find out: Cryptocurrency tips
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Is Bitcoin A Good Investment
Heres one of the most commonly asked questions about Bitcoin: is Bitcoin a good investment?
Well, the real answer is no investment is inherently good or bad. It depends entirely on your risk tolerance, your investment strategy, and your financial goals. Before you consider Bitcoin as an investment, you should carefully consider your own goals and determine what you want to accomplish in your investment activities. Do you want to develop a passive income? Become a full-time investor? Save for retirement? Answering these questions will help you figure out whether Bitcoin is the right investment option for you.
Bitcoin is a very high-risk investment because its a volatile asset. That means that Bitcoin values may rise or fall dramatically in value over a very short periodeven as quickly as a few hours or days.
Like all cryptocurrencies, Bitcoin has no intrinsic value. Its not backed by any physical asset, like gold or silver, and theres no central regulator to ensure that the value remains stable. Furthermore, Bitcoin value isnt linked to the profits of any one corporation. The value of Bitcoin is dependent on market demand. When there are more people buying Bitcoin, the value will increase. When there are fewer people buying Bitcoin, the value will decrease.
To make a significant profit on Bitcoin, you may need to rely on timing the market, which is a difficult and generally ill-advised investment strategy. Nonetheless, theres a potential for profit.