Is Bitcoin a good investment? In the past ten years, crazy skyrocketed around Bitcoin and a sharp decline. It is difficult to predict whether this cryptocurrency will be a global reserve currency or a widely accepted value storage method like gold. Bitcoin is undoubtedly a revolutionary technology. Compared with 2012, its risk after 2022 is much smaller. Let ’s take a look at whether it is worth investing in Bitcoin. What are the investment methods of Bitcoin?

History of Bitcoin

Since its establishment, Bitcoin is the first digital asset to generate the current cryptocurrency ecosystem. The white paper described after the financial crisis in 2008 described the technology was a quiet start of the cryptocurrency revolution. For a long period of time, it trained a group of underground investors that regarded them as a possible alternative to the physical currency system. Bitcoin has now become a household name, because institutions and governments are developing methods to meet the growing exposure needs of customers.

Similar to the Internet is a speculative investment, Bitcoin has also been criticized. In fact, Bitcoin's current adoption rate exceeds the Internet in 1998, and millions of people now have Bitcoin. And it seems to be getting larger and larger.

In 2021, Salvador became the first country in the world to make Bitcoin a legal currency; Paraguay and other small countries hope to follow suit. Salvador is also the first and only country to have Bitcoin in its state treasury. As of early 2022, Salvador had 1,800 bitcoin. President NAYIB Bukele announced his purchase on Twitter without avoiding it.

Cryptocurrencies are not traditional investment

During the popularity of COVID-19, as people who maintained social distances at home began to get involved in online transactions, the cryptocurrency market began to explode. Value has soared to a dazzling height, but it has dropped sharply this spring. Bitcoin reached a peak of $ 69,000 in November 2021, but now hovering less than one -third of the value.

TerraUSD is a stable currency, and its value should be linked to the US dollar through complex algorithms. However, when it became mentally confusing in June, it burst into an amazing way, and now it is basically worthless.

The U.S. government is currently studying how to supervise digital assets to protect investors and make full use of development industries including NFT, irreplaceable tokens, and "decentralized" digital coins. In June, senators Cynthia Lummis and Kirsen Gillibrand proposed two -party legislation.

The bill is still a long way to go to the law. It will regard most cryptocurrencies as gold and other products, not stocks or bonds. It will also impose stricter regulations on stablecoins, prohibiting the algorithm -based stablecoin, such as the TerraUSD token with a lot of fate.

Despite risk, is Bitcoin a good investment?

Similar to any speculative investment, there is obviously major risks to buy Bitcoin. With the traditional financial community aware of the subversion of Bitcoin, they must choose to use cryptocurrencies or face irrelevant issues. Its fluctuation risk is one of the main factors to determine whether Bitcoin is a good investment, but it is not necessarily good or bad. Personal decision to invest in Bitcoin depends on your preferences for risks and your views on human future. For example, Russia said they are studying cryptocurrencies to reduce their dependence on the US dollar. Bitcoin may subvert the US dollar in a huge way. It is too big in this regard and cannot be ignored. If this damage is successful, Bitcoin may be a great investment.

The main reason for traditional investors to contact Bitcoin is hedging inflation and potentially collapse based on the legal economy. The volatility of Bitcoin is a matter of possible investors' attention, but as institutions and governments enter the market with long -term interests, it is expected that the volatility will always decline.

Bitcoin wants to be assets like gold

Bitcoin has existed for 13 years. It is the oldest cryptocurrency among more than 18,000 cryptocurrencies with the highest market value. Primitive cryptocurrencies account for more than 40% of the valuation of the cryptocurrency market.

At present, more than 19 million Bitcoin has been mining, with a maximum limit of 21 million tokens. This idea is that this limited supply will mean that Bitcoin will maintain its value like other products such as gold, and at the same time decompose with the rise and fall of the stock market.

However, the system has been criticized for its environmental impact, excavating computers required for new token, and a large amount of energy for consumers who maintain blockchain consumers. The method of working in the Bitcoin algorithm also means that it takes longer to confirm that the transaction may be performed than the transactions performed through more mature routes.

Can Bitcoin be exchanged for real money?

Bitcoin can be converted into cash in several different ways. You can sell Bitcoin on cryptocurrency exchanges such as ETORO or Crypto.com. Cash will be stored directly into your bank account. This is a simple way to convert your Bitcoin into cash, but you must remember that the price of Bitcoin has been changing. Yes, you may need cash, but if the price of Bitcoin has soared again and again, you may kick yourself in a few years.

Bitcoin ATM is expensive, but if you have one near you, you can exchange Bitcoin there. However, these ATMs usually charge high fees, so the use of exchanges is likely to be much better.

Is Bitcoin a good investment?

As the agency adds Bitcoin to their balance sheet, Salvador officially regards Bitcoin as a legal currency. It seems that Bitcoin may be the future of the currency, or at least a recognized value storage method. However, due to the large market fluctuations, investors who avoid risks still hesitate to buy Bitcoin, let alone buy any other cryptocurrencies.

Because Bitcoin is not controlled by the central entity, its monetary policy is much better than any government. Cathie Wood, the CEO of ARK Invest, describes Bitcoin as "rules -based currency system" because Bitcoin's monetary policy is set by code parameters. In view of the popularity, the government printed more funds than ever, and investors are looking for alternative investment to hedge inflation. Many people are turning to Bitcoin to promote the use of cryptocurrencies for a long time.

Is Bitcoin a good investment? As long as you invest and invest wisely, you can. However, if investors try to treat Bitcoin like any other assets, they may turn Bitcoin into a bad investment.

How to make money by investing in Bitcoin

Like any investment, making money depends on the price of your sale of assets. If you sell when your price is higher than when you buy it, you will make money.

If you sell at a price below the purchase price, you will lose money.

For example, if you invest in Bitcoin at the beginning:

It will be sold on December 31, 2020, and you will get 300% profit

It is sold on December 31, 2018, and you will lose 73%

The volatility of Bitcoin is extremely strong, so the trick is not to panic, and it is unavoidable to clarify your losses by selling when its value inevitably declines. This is the same for all investment.

What you need to consider before investing in Bitcoin

Like any investment, cryptocurrencies also have risks and potential returns. Compared with traditional types of investment, cryptocurrencies are particularly risky.

Here are some things you need to consider before investing:

1. We absolutely don't recommend investing your life savings in the cryptocurrency market

2. It is best to see it a bit like a gambling, so only invest in a small part of your disposable income, and you are ready to lose a lot

3. Never invest more than the loss you can bear

4. If you don’t have much money left at the end of each month, it is best to avoid cryptocurrencies and focus on saving money.

5. Like traditional assets, it is best to treat cryptocurrencies as a long -term investment rather than short -term investment to give you the best opportunity to make money

6. Cryptocurrencies are easily fluctuated, and they are easily affected by the crash of bull markets and market collapse

How to invest in Bitcoin

Buying coins (or coins) on cryptocurrency exchanges is the most common way to invest in Bitcoin, and it is to obtain Bitcoin through Bitcoin mining.

But there are other options:

1. Buy stocks of Bitcoin -related companies

You can invest in cryptocurrency exchanges, and even buy stocks of companies receiving Bitcoin payments.

2. Bitcoin ETF

You can invest in the Bitcoin Exchange Trading Fund ETF. This copy the price of cryptocurrencies, allowing you to buy funds without actual transactions Bitcoin itself.

3. Investment blockchain technology company

You can invest in the blockchain network (system for recording encrypted information). For example, technology platform Solana claims to be the fastest blockchain in the world.

4. Bitcoin Fund

Several investment companies are launching Bitcoin funds.

It still fluctuates, but it may be easier to sell your investment and recover your funds compared to direct investment.

There are also some funds that have a certain opening on traditional assets such as Bitcoin and stocks and bonds.

5. Bitcoin options

These are a form of financial derivatives that give you the right to purchase or sell Bitcoin at a set price (called execution price) before an expiration date.

Unlike buying bitcoin cryptocurrencies directly, Bitcoin option enables you to take speculative positions (up or down) the future direction of market prices.

If you think the market price will rise, you will buy the options:

If your prediction is correct and the market price rises to the execution price higher than Bitcoin options, you will be able to purchase Bitcoin at a pre -specified price. The increase in the price of Bitcoin exceeding the exercise price determines how much profits you will get.

If your prediction is wrong and the price of Bitcoin falls, you can make the off -date contract expire, and it will only lose the premium you paid for the opening of the position.

FAQS

What is Bitcoin?

Founded in 2008, Bitcoin is the most popular cryptocurrency and the largest cryptocurrency.

The original intention of the blockchain was to subvert the traditional global payment network by enabling the point -to -point digital payment that does not require credible third parties (such as financial institutions).

Is Bitcoin a long -term good investment?

With the existence of Bitcoin, we have seen it exponentially growing. If history repeats (we have seen many times now), Bitcoin often reaches a record high every 3-4 years.

Why does Bitcoin rise?

Although the driving force behind Bitcoin's recent price rise is not completely clear, the media will be attributed to the following points:

The market is seeking Bitcoin as an inflation hedge tool. Unlike many major global currencies (including the US dollar), the fixed supply of Bitcoin is 21 million units.

Large -scale digital payment companies such as PayPal, Venmo and Square now accept Bitcoin as a form of Pay or exchange on its platform.

Several companies, including Tesla and data analysis company Micro Strategy, have announced a large purchase of Bitcoin. They also announced that they would begin to accept Bitcoin payment.

Is Bitcoin a safe investment?

The value of Bitcoin or any given cryptocurrency is still highly uncertain, and they all show significant price fluctuations.

Cryptocurrencies are not ordinary shares of the company and are not traded on the stock exchange. Different from investing in stocks or common funds, there is no basic fundamental (cash flow, profit, tangible assets, etc.) to support their valuation. This caused uncertainty leads to extreme fluctuations in cryptocurrencies such as Bitcoin, Ethereum and Litecoin. Other risks include the price manipulation of unknown market participants, the possibility of government intervention, and competition from other cryptocurrencies. The US Securities and Exchange Commission and other financial regulators have recently issued letters to warn investors' risks.

How do you buy Bitcoin?

Bitcoin cannot be traded directly unless you buy cryptocurrencies from the owner directly. They are usually purchased on the exchange, such as Coinbase, and users can exchange Bitcoin with currency or other cryptocurrencies on the exchange. Buy the fragmentation of Bitcoin.

The above is about whether Bitcoin is a good investment, and how we should invest in Bitcoin to make money. The strongest indicator of Bitcoin value is the absolute scale of its market value -more than $ 600 billion. If we point out from the perspective of the Standards 500 Index, it will make Bitcoin the top 10 companies in the world, from zero to half trillion in just 12 years. Only a few companies, such as Facebook and Tesla, have grown so fast. Bitcoin is unique in assets. It is the first value storage method in the world that is not affected by demand to increase.