How much to Invest in Bitcoin- Five Factors to keep in mind.

  • March 20, 2020

The key to any good investment is to know and understand all the aspects of it. If you dive in blindly, you might sink. So it’s best to go through all the factors of investing. When it comes to newly emerged ideas like cryptocurrency, you definitely need to be extra careful. There are are variousgthings you should consider before deciding how much you should invest in Bitcoin, considering it’s unstable prices. Let’s discuss some of these below: 

 

  • The Timing. 

 

Needless to say, the investors became attracted to Bitcoin during its peak time. It was an air of change and adoption of digital currency globally. It’s only logical that people will follow the media which always highlights the latest trends. Timing becomes a crucial factor to be considered for investment because every market haba a cycle of rise and fall. If you analyse the data and study it closely, you’ll observe a repiting pattern, although the exact values keep changing, the phases maybe predictable. Thus, you should check the current market status in order to be sure about the possibile profit you are eligible to receive. 

 

  • Flexible Mindset

 

Trust me on this, the major reason why so many people are in dilemma about investing is because they cannot stick what they say due to fear or hesitation. The very first step to invest in Bitcoin is to to firmly decide that you actually want to invest in Bitcoin. That being said, you must also have an open mind so that you can be flexible in your approach- Let’s say you want to invest $10,000 over the next 12 months. But the market is currently close to its peak Instead of investing $830 every month, you can adjust the amount to start with $300 per month and invest more to compensate when the prices go down. 

 

  • The Risks:

 

The Bitcoin market is very volatile. The value of Bitcoin despite being at it’s peak in 2017, plummeted down to its 80% in less than a year. 2018 was not a great year for Bitcoin but 2019 averaged around $8000 per Bitcoin. 2020 is predicted to be a good year, with experts saying perhaps this is when the Bitcoin zenith with re-write itself.   But in the end, it’s unpredictable and you’re still hanging on a cliff of “What it’s” again. Think of an amount that you won’t regret losing entirely. That’s how well proepared you should be while investing in a cryptocurrency like Bitcoin. 

 

  • The Profits:

 

The uncertainty of Bitcoin value can be a blessing. It may enable you to get  200% return as a result of which you might become digitally very, very rich. When Bitcoin was soaring up high in 2017, a large number of investors became millionaires, no kidding! And in they had invested a large amount of their savings for this purpose. If they took the risk, and turned it into their profit. So can you. But I won’t encourage you to invest your entire life’s saving here, it’s unadvisable. A reasonable amount is how much you need to invest..

  • Diversification

Many people might think that if they invest everything in cryptocurrency, they will become rich some day for sure. That’s not true. It’s unwise to put all your money at one place. That’s why it is better if you invest in stock like gold, stock or even real estate. That way, your money is invested in a diversified manner and you are not susceptible to more loss. Afterall, your portfolio needs to have minimal amount of risk attacked and that is only possible by including more than one asset. 

Therefore, keeping these five factors in mind, you should be able to decide what amount of investment will be best for you. And remember, don’t ever invest more than what you are willing to lose. 

Bitcoins: New Age Investment Avenue

  • March 20, 2020

Almost every sphere of business, commerce, economy, and even our everyday life is dependent on the Internet. There should be a little surprise for anyone to notice that Bitcoin has claimed the interest of investors globally. Secure, global, and digital; this currency is open for everyone. It is an exciting new asset class; however, investing in Bitcoin demands time and effort. 

Why invest here?

Before answering this question, we need to understand that what makes Bitcoins valuable? Gold, for instance, is in limited quantities on earth. Even when gold is mined continuously, there is always less and less gold available for buyers. It gets more expensive for buyers, and so does mining. 

The same applies to Bitcoins. The number of Bitcoins is limited to 21 million, and with time and a limited supply rate, it’s bound to get costlier. 

There is only 21 million Bitcoin, and as time goes on, they become harder and harder to mine. Take a look at Bitcoin’s inflation rate and supply rate. It has a sound monetary policy, and you can see whenever new Bitcoins are created or even know how many Bitcoins are in circulation. 

You can digitally transfer Bitcoins anywhere across the world. Payments here are never blocked, and it is censorship-resistant. It also provides safeguard against failed governments or sunk economies. This currency practically remains isolated from any global recession too. 

The Internet made information global and easy to access. A sound, global currency like Bitcoin will have the same impact on finance and the global economy.

If you understand the potential impact of Bitcoin, it won’t be hard to comprehend hard why investing in Bitcoin may be a good idea.

Its price

There is no official price of Bitcoins. It’s set by whatever people are willing to pay. An apparent game of demand and supply is applicable here. For further information, a price index can be referred to. Bitcoin price means the cost of a single Bitcoin. Some exchanges let you buy Bitcoin for any amount. You can even buy less than one Bitcoin. 

The right time to buy

Like any other investment venue, there are no guarantees here. Throughout its brief history, the value of Bitcoin has increased at an accelerated pace. The downfalls were slow, and market stabilization was fast. There are several tools that one can use to perform analysis and research. This currency never gets affected by an individual country’s economic situation. This currency is global. 

It is noticed that the global economic or other chaos generally benefits the Bitcoins in terms of pricing. Apolitical in nature, this digital currency remains free from any influence of a government or trade blocs. 

Therefore, investing in Bitcoins requires you to think in a global perspective. 

Bitcoin investment: How and Where

Depending on your country, the ease or difficulty of buying Bitcoins will vary. However, developed countries offer more liquidity and options. This digital currency being global can be easily purchased from anywhere in the world. 

You can use various exchange finders to find a place where you can buy Bitcoins in your country. 

Security

It is an asset, and like anything valuable, there will thieves, hackers, and scammers will be after your Bitcoins. Hence, security is a prime concern here. It would be best if you considered buying Bitcoins wallets. These are specially built with safety in mind, and one should always keep the Bitcoins in these wallets. 

You are dealing with a currency that is on the Internet. It means that stealing from any corner of the world is easy. Bitcoins in isolation are secure; however, they are only as reliable as the digital wallet in which you have stored it. 

When dealing with Bitcoins, security needs to be your prime priority. 

Does investment in Bitcoin Mining make sense?

The Bitcoin mining industry has grown at a rapid pace. Earlier mining was possible to conduct on any computer that we use at home or office. However, today it costs a lot- nearly millions of dollars. Hence, now it is done in specialized data centers only and yes, profitably. 

Consider these data centers as warehouses. It’s a warehouse full of computers that are created with the sole purpose of mining Bitcoins. It’s a costly business to conduct. It will cost millions of dollars even to start a profitable mining operation. 

It is, therefore, suggested that for new entrants in Bitcoins business, they should avoid Bitcoin mining. Given the level of investment it requires, it can never be a profitable business for anyone. 

For learning purposes or any reason else, you can start a small mine and play around with it. However, this home mining business can never turn profitable. You cannot expect to get a satisfactory return from it.