Find the Best Way to Invest Your Money in Bitcoin

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bitcoin investingThere are dozens of different kinds of investments today. Brokers, financiers, and bankers use foreign currencies such as the US dollar, pound sterling, euro, yen, and Swiss franc. They sell and buy gold, cotton, oil, gas, and rice futures to earn, save, or hedge. They give their funds to banks, insurance companies, hedge funds, or venture banks. Nowadays, the financial world has a lot of tools, which may be used, and another one has recently appeared ― bitcoins; a new phenomenon in the economy. There is one precise aspect that makes bitcoins attractive to investors and this is the high value of bitcoins and its incredible liquidity.

The Nature of Bitcoin

As an asset, it’s hard to understand what Bitcoin really is. There are features that make it similar to a commodity or good. They should be produced with some expenditures and costs like electricity bills or the cost of equipment for mining. Also, a bitcoin is similar to a share because it can be traded on an open market. And finally, it can be transferred to another person like cash or divided like digital currency. Nevertheless, Bitcoin can certainly be used as an investment tool. A lot of investors find Bitcoin as a good alternative or a hedge against the current monetary system, which doesn’t look very reliable nowadays.

Investment: Find Your Way

So, how do you start a Bitcoin investment? Let’s make a little guide. The first and most obvious step is to purchase bitcoins yourself. You may buy them on an open market like other currencies. This is simple and fast, but at the same time, there is a downfall. Cryptocurrencies are very young ― that’s why their prices are volatile. Bitcoin’s price can fall and rise during a single day and you definitely must have nerves of steel not to lose all your savings at the bottom of bitcoin’s price. You may get rich in one day, but also lose everything in the twinkle of an eye.

The way to avoid such risks is funds. There are trust funds, which allow you to trade bitcoins on an open market. You may acquire trust shares and hedge your risks of cryptocurrency’s volatility. In this case, you do not own bitcoins; instead, you own a part of a company that does. You get profit when your trust fund’s price increases and lose when it decreases. It’s much safer, but trusts also require a fee for their work.

Related: Two Different Ways to Invest Your Bitcoins: Trade and Store

Another good way to send your money in cryptocurrency and get some return is to invest them in a promising startup that is based on the Bitcoin economy. It is probably as risky when you buy and sell bitcoins yourself because startups tend to go bankrupt in the first two or three years. Though, it’s still very profitable in terms of success. Who knows, maybe  you’ll become a business angel for a new ‘Zukerberg.’

And one last way to earn money with Bitcoin is mining. Well, of course, mining is very risky, but it also can be very profitable if you win the race. You must have plenty of money to build up your own data center with lots of ASICs and other equipment like coolers. If you haven’t thousands of dollars for the newest miners ― which must be delivered as soon as possible ― you probably should not start at all. Investment in mining is not for everyone. However, it does produce some profit in a way.

Invest Wisely

Whatever you choose to do, you should always remember the main rule of any good businessman ― and this advice is applicable everywhere: Do not put all your eggs into one basket!

The bigger your portfolio, the safer it is. Bitcoin, like many investment tools, has its own risks. It can be forbidden in the US and other countries, like was in China. It can lose all its popularity, which would lead to a slow decline in price over a few years. All your coins in your bitcoin fund can be stolen by hackers and nobody will compensate you for your loss. On the other hand, you may be one of the lucky ones who possess bitcoins during a time when they are very widespread and common. One day, you may wake up a millionaire. Anyway, be careful and invest wisely.

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