All About Bitcoin
Thanks to its good press and high value, Bitcoin has become one of the most popular cryptocurrencies in the market. However, individuals often associate it with cyberattacks and financial loss due to cybercrimes.
But don’t worry because this particular digital currency is not that complicated. It’s just like money in a bank, except you’re responsible for keeping it safe.
Bitcoin uses a peer-to-peer payment method, allowing users to transact with one another. As a result, users don’t need third parties to purchase or sell BItcoin, which means they can save on the transaction fees that typical banks charge.
To sum it up, Bitcoin is created — or mined using complex mathematical algorithms composed of letters and numbers. Powerful computers solve these highly complicated problems and generate digital currencies out of them. Moreover, the same equation is used to unlock it, acting like a virtual key.
Bitcoin: A Fluctuating Currency
Enthusiasts have hailed Bitcoin as a market-disrupting liberation. But, more so, it has been demonized by plenty of personal finance experts, labeling it as a “dangerous” creation. And indeed, Bitcoin is a volatile investment, which means that it can spark up today and die down tomorrow.
To give you a light summary, Bitcoin’s price has fluctuated from $30,000 to $60,000 per BTC over the last few months.
This particular cryptocurrency has had a rough couple of years. From December 2020, it surpassed many of its competition by dramatically increasing value, only to go back down again. And because of its unforeseeable volatility, investors often find themselves anxious about whether their money will grow or not on a daily basis.
Another thing that keeps investors on their toes is that Bitcoin, among other cryptocurrencies, is not determined by any intrinsic value. Instead, what determines its value is a simple and intangible thing: confidence. So it’s essential to be prepared if you ever choose to invest in it.
How Safe Is It To Invest In Bitcoin?
Before anything else, it’s essential to understand that Bitcoin is just like other forms of investment. Unfortunately, the money you will put into this cryptocurrency won’t be safe from economically-driven value fluctuations.
And to be frank, Bitcoin is a volatile currency which means that it isn’t for the faint of hearts. So if you’re on the hunt for a safe investment with a surefire return, Bitcoin might be too risky for you. So steer clear from any cryptocurrency, for that matter.
And because of Bitcoin’s constant change in value, experts typically ensure that they only allot 5% of their investment portfolio to Bitcoin. Another thing to consider is having an emergency fund paired with paying down high-interest debts prior to investing in Bitcoin or other digital assets.
How To Make Money On Bitcoin
Just like any other investment, your Bitcoin assets will grow depending on:
- How much BTC do you purchase
- When you purchase (if it’s at a hit or dip)
- How much BTC do you sell
- When you sell BTC (if it’s at an all-time low or all-time high)
Indeed, you’ll make money if you purchase your BTC assets at a low price and sell them at a higher price. If you, however, sell it for a lower price than you purchased it for, you won’t have any ROI. For example:
- If you invested in 2020 and sold your BTC assets by December 2020, you would have had a 300% profit;
- If you invested in 2018 and sold your BTC assets by December 2018, you would have had a 73% loss
But even after a loss, your ROI still depends on how much bitcoins are left in your account. You can always wait until BTC’s value skyrockets to earn back what you lost and make extra income.
It’s crucial to identify the correct timing for trading your BTC crypto assets. And instead of panicking, you should start observing more. Remember: Bitcoin is a highly volatile asset, so proper timing is necessary! You have to learn how to play it before it learns how to play you.
The Future Of Bitcoin
As more and more individuals feel comfortable owning Bitcoin and trading in the crypto market, the entire community will grow. As a result, it will shed some light on the wonders of BTC. And did you know that despite significant setbacks, Bitcoin continues to attract new investors every day? Because of this, it continues to grow its credibility as an asset. It’s now seen as an investment with stored value in the future. In fact, some enthusiasts label it as “digital gold.”
However, it’s important to note that Bitcoin isn’t infinite. Overall, there are only 21 million BTC assets to be mined.
Bitcoin’s early days might have been scarred by cybercrimes such as fraud and hacks, but the crypto community knows better now. What matters the most is investing in a safe and secure Bitcoin wallet and using complex passcodes to minimize cyberattacks.
And to ease your mind, Bitcoin is just like any other form of investment. And any investment comes with certain risks. Only this time, Bitcoin is a digital currency with a volatile nature, so it’s relatively essential to know when to purchase and when to trade. Its volatility makes it all the more exciting. So is it safe to invest in Bitcoin? To answer this question, yes — it is as long as you have the confidence and guts to make quick decisions when it comes to trading.