What do you need to know about investing in Bitcoin?
One the past few years, many people have made money in cryptocurrency, and Bitcoin has been one of the most popular investments.
But as with any investment, as well as lucrative opportunities, there are plenty of risks. And earning money is not a given. That is why it is important to increase your knowledge as much as you can, and take care to make wise decisions, never investing more than you can afford to lose. You can read more about investing in cryptocurrency at bwcevent.com/crypto/.
When investing in cryptocurrency you need the right strategy. And it has to be YOUR strategy; simply copying someone else’s strategy won’t work unless you understand fully their rationale, and trust their expertise. Even then, you potentially can risk following someone else into loss. Experts have made poor decisions sometimes too!
Instead, you need to educate yourself as much as possible, and make decisions based on your own knowledge. And in this article we will look at one cryptocurrency in particular – Bitcoin – and find out why people are still investing in it.
Why use BTC?
The cryptocurrency market is quite well diversified, and you have no shortage of choice when planning your investments. You will come across thousands of options in cryptocurrency, and for many years, the most popular choice for many investors has been Bitcoin.
And for good reason: Bitcoin has been around since 2009, and has increased in value significantly since then. It is also seen as one of the more stable cryptocurrencies. Each Bitcoin is mined using an encrypted code (a string of numbers and letters). The same equation used to create the code can unlock it like a virtual key.
Cryptocurrencies like Bitcoin are digital assets that work like normal currency, but with some key differences. For starters, there is no physical coin with cryptocurrencies. They use peer-to-peer payment methods which eliminate banks – saving time and money when making transactions. They also work across international borders, which makes moving money around much easier and reduces red tape.
People who invested early made a significant profit from Bitcoin, and it has long been seen as the poster child for cryptocurrencies. Like all cryptocurrencies, Bitcoin has had its ups and downs. But this is one of the things that attracts investors – a fluctuating market offers greater and faster opportunities for people who make the right calls on when to buy and sell.
For example, in 2018 Bitcoin decreased in value by 83% before going on to hit new record highs in 2020 and 2021. In November 2021 Bitcoin reached a high of $69,000. This year we have seen the price drop again, and there are no guarantees of where it can go in the future.
But for some, that is part of the attraction. Many people still predict that cryptocurrencies like Bitcoin could be the ‘cash’ of the future and, as such are continuing to invest in them, albeit with some caution right now, and armed with plenty of research and knowledge.
As with all investments, there are no guarantees with cryptocurrencies in general, or Bitcoin in particular, and a wise investor will ensure that they diversify their portfolio to spread their exposure and minimise risk.