How to Invest in Bitcoin Stock
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Investments in Bitcoin provide an alternative for those who wish to diversify their portfolio. It is possible to invest in the currency itself without purchasing any Bitcoins by buying into Bitcoin companies. Due to the nature of Bitcoins asset levels may increase or decrease dramatically within a certain period of time, so it is not for the faint hearted. There have been reports of those who have lost over half their investment within a period of a few months. Alternatively, there are those who have gained quickly due to price surges and profited from the value of Bitcoin rising. How much you would invest in Bitcoin is entirely up to you, and we will try to provide below some evidence as to why it is growing as a decentralised currency.
What are Bitcoin Stocks?
Bitcoin stocks are much like penny stocks: they are typically not very liquid, and the volume of shares traded every day is not high. It can be hard to exit, and coupled with wild swings means that there is a possibility of bigger losses. Manipulation is also a possibility due to the light regulation due to the over-the-counter method of trading as opposed to through a medium such as the New York Stock Exchange. It is also vulnerable to bad news, such as those of bankruptcies of companies that invest in Bitcoin.
Why Should I Invest in Them?
No one would invest in such an option without a return. There is a possibility of Bitcoin stocks rising as much as 200 to 300% within a short period of time.
It is recommended that you only invest a small portion of your portfolio within these stocks in order to manage your risk. Jack Tatar, a popular author and former CEO of GEM research solutions, placed $25,000 into the Bitcoin Investment Fund (BIT) as a bid to become involved with Bitcoins. Due to the timing of his investment, the value of his portfolio dropped in half from $64.51 to $31.16. However, Jack remains optimistic about the potential of Bitcoin. As mentioned in his writeup, Bitcoins are still growing as a medium of currency. You can donate to charity, use it at universities such as MIT, and the cryptocurrency even received an endorsement from the Financial Planning Association claiming “individual investors can benefit from holding a small amount of Bitcoins in a diversified portfolio”. It should be noted that investing in Bitcoin is not necessarily the same as owning them. The aforementioned BIT is a company that operates its assests entirely in Bitcoin, but purchasing stocks here is the equivalent of owning part of the company and not the currency.
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How Can I Keep My Bitcoins Safe?
Alternatively, should you decide to invest directly into Bitcoins, consider the possibility of security issues that may arise in the purchase of a large quantity. Bitcoins weren’t initially intended for long term storage, meaning that there are certain vulnerabilities that could arise as a result of security breaches. One popular method is cold-storage – this essentially places your Bitcoin security keys in an offline, physical location on a computer or device that is not connected to the internet. Better yet, print out these keys into an offline wallet called a paper wallet to carry around. Once this process has been properly secured, consider diversifying your Bitcoin purchases through alternative Bitcoin currency through multiple websites. Dogecoin, Litecoin, Darkcoin, NTXcoin and Peercoin all hold significant value and can make the portfolio more valued. Be aware that they also run the risk of losing their value permanently.
Bitcoins are Popular Online
Major online retailers have begun accepting Bitcoin. It all started off with a humble website known as Bitcoinshop which went online in order to prove to investors that the currency had a market online. When sales rocketed and people began purchasing items as they would on any other online retailer using Bitcoin, major companies began to take notice. Overstock became the first company to accept Bitcoin, and saw over $100,000 of value in sales of Bitcoin within 24 hours of their release. This accounted for 4% of their daily sales revenue. Thanks to the power of Bitcoin, many other online retailers began moving towards investing in the currency such as Ebay through their payment processor Paypal.
You Can Play Bitcoin on the Public Markets
Sir Richard Branson noted that Bitcoin was “working” and vouched that it had a future. The resulting confidence should inspire investors to pay some attention to public equity markets, where it is possible for retail investors to park their cash. Here are some apps and companies that have taken to the scene and received positive results.
BTXTrader is an app that allows users to execute orders on five of the most popular Bitcoin exchanges. It features the ability to place stop-loss orders and replicates playing on traditional stock exchanges. The app was acquired recently by WCPS International, a company specialising in engineering in wireless communication, construction, and electrical power. Stocks for the company rose from $1.51 to a high of $2.75 upon the announcement.
SmartTrans is a mineral exploration company that is revamping itself into a software services company that is focusing on subsidiary Bitcoin mining. The firm purchased a $500,000 on 30th of November with Zhenya Tsvetnenko on a Bitcoin mining contract. According to public sources, the company generated a gross revenue of $150,000 within the first week.
Zynga is a popular gaming giant that is well known for online social gaming such as Farmville. The company announced that it would be experimenting with Bitcoin payments, and saw a 10 percent point increase to its stock prices to a high of $4.059 as of 4th of January this year. With $1bn in annual sales, the company could prove to be a market leader in the video gaming industry for Bitcoin in the near future.
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