Many corporations have recently started embracing Bitcoin as a payment option. It is a volatile currency but the reward is highly lucrative as seen in its sudden surge in price recently. People are clamoring to buy, own or trade it and dare I say it is a wise investment. It is critical to have some fundamental insight into investment in bitcoin. There are various avenues available through which you can invest in Bitcoin and make money.
However, you need to gauge whether those avenues are a worthwhile option or not.
To make things simple for you, we will discuss various ways of investing in bitcoins. When you abide the mentioned investment approach, then bitcoins will turn out to be a lucrative option for you.
Different ways to invest in Bitcoins.
1. Bitcoin Funds and Trust.
There are times when you are not keen to handle bitcoins on your own. The good news is that there is a way out for you. What you can do is buy bitcoin shares in a publicly-traded trust. These trusts offer a portfolio that can hold the cryptocurrency.
You can consider purchasing the bitcoins from the Greyscale Bitcoin Trust. The best thing about this trust is that it tends to track the cryptocurrency. Plus, it trades the cryptocurrency via the traditional market. There are other reliable trusts, too, like CoinShares. The fee of the trust can be relatively high. Learn more Are Bitcoin Investment Trust and Safe in 2021?
2. Investment apps.
Many cryptocurrency apps keep emerging at the forefront in recent years. For example, in November 2020, PayPal began offering an exclusive facility to its US customer. What the customers can do is that they can buy and sell using the cryptocurrency. Plus, they can also make their purchases through cryptocurrency. If you want to know more about cryptocurrency.
3. Buying Bitcoins through Cryptocurrency Exchange Platforms.
Now, the investors also have the facility to buy the bitcoins from the exchange directly. However, this approach should only expe investors. The truth is that the exchanges tend to have some advantage over the Investment apps and the funds.
The exchange has a lower fee. As a result, affordability will not be an issue for beginner-level investors also. It will not be a problem for you to withdraw the bitcoins from an exchange.
You can also easily download the coins to another account—no need to worry about anyone hacking and trying to steal your coins. There are many guidelines that you need to follow when investing in cryptocurrency through an exchange.
The essential aspect is that you need to go for a reputable exchange. Be careful of crypto exchange scams, which is why you need to play safe.
Go for an exchange that has a physical address. If the business has no verifiable physical address, it is a red flag. When you opt for an exchange for investing, security should also be a concern for you.
Remember, if it is difficult for you to create an account on an exchange, it shows the high-security level. The fee structure is also a concern when you choose the exchange. If you plan to make transactions every day, your exchange needs to have a low fee structure.
Now, the best way to have a secure investment is to have a diverse portfolio. The diverse portfolio is only possible if the exchange offers plenty of cryptocurrency options. Well, this is why you must choose an exchange that has a variety of cryptocurrency options available for you.
When choosing the exchange, you need to evaluate the support team also. If the live chat support team is responsive and answers your queries timely, you should consider opting for such an exchange.
4. Consider Buying and holding the cryptocurrency.
Cryptocurrency is indeed a volatile market. The chances of loss are always there. Plus, the risk is massive when you make crypto investments. Like to invest in Bitcoins? You can also consider bitcoin trading.
Most investors want to take a minimal risk when it comes to bitcoin trading. The point is how you can reduce the risk factor. The answer is simple. You can apply the buy and hold strategy. Well, it means that you buy the bitcoin and do not sell it right away.
You hold the coin for a significant period. You do not get influenced the market fluctuations during this period. However, you do check out the price of the bitcoin after an extended period.
The strategy is easy to follow. Even beginner-level investors can try it out. If you want to invest in cryptocurrency, try out various trading strategies. You can also try out swing trading. It means that you buy the cryptocurrency at a low price. You sell the cryptocurrency when the market is high.
If you are looking for some quick profits through cryptocurrency, you can also opt-in for day trading. It means that you will not hold the cryptocurrency overnight. What you need to do for day trading is carefully analyze the market.
When the scenario seems feasible, you can sell off your cryptocurrency to make a significant profit. As an investor, you can also think along the lines to explore Arbitrage. By Arbitrage, it means that you buy your cryptocurrency from Exchange A. Next, you sell the cryptocurrency at a higher price on Exchange B. Things may not fall in place in the first go.
Well, this is why you need to take calculated risks only when trading. You should not put everything on the line right away.
Evaluate the market scenario, and only then should you think along the lines to make your investment. As an investor, you have to watch your step to avoid pitfalls.
Things to remember when investing in Bitcoins.
1. Start with small investments.
You may be excited to invest in Bitcoins. However, there are many things which you must consider before you invest. Cryptocurrency has unpredictable behaviour. Well, this is why you need to follow one basic investment strategy.
You must start slow. It is crucial to start with small investments. You should make significant investments in less volatile cryptocurrency. The practice helps to reduce your losses this way.
Plus, it is a practical approach to indulge in risk mitigation.
2. Do not forget the taxes.
Remember, nothing comes for free. Tax is yet another crucial aspect that you must remember when investing in cryptocurrency. Once you spend your cryptocurrency, then you will have to bear the tax fee.
The good news is that bitcoin taxes are usually lower than the average income rates.
You should only go for short-term bitcoin investments, provided you watch the market trend daily. Otherwise, you should avoid this risk all means necessary. The essential aspect is to only go for bitcoin investment when you know the relevant niche. If not, then you will have to deal with losses.
If you want to invest in bitcoin through trading, most of the trading platforms offer a demo account. What you should do is try out the demo account before starting the trading for real. Make sure to go for a reliable trading platform.
The demo account will allow you to explore the look and feel of the platform. When you are about to trade, you should go through different platforms’ educational material.
The education material will give you the necessary insight into how you need to trade. You will be able to trade with confidence. When you are new to bitcoin investment, it is crucial to do your research.
You need to build on to your skillset with every passing day. The benefit of this approach is that losses will not come your way. When you invest in bitcoins, then you need to have a secure storage facility also.
For example, you should go for hardware wallets to store your bitcoins. Hardware wallets are not easy to hack. As a result, your bitcoin investment will remain secure all means for sure.
You cannot emerge as a seasoned investor in one day. What you need to do is learn from your mistakes. Every mistake should be a lesson for you. The crucial aspect is to improvise your investment strategy.
The crypto market is volatile. However, the fact remains there that margin is available to make plenty of profit. It depends upon you how you cash on the market. Make sure that you abide the strategy mentioned above to make profits as a bitcoin investor.
You will be happy with your decision. You will not have any regrets at the end of the day. Make your choice now.