Is Bitcoin a safe investment? Like investing in fiat currencies and commodities, buying and selling Bitcoin isn’t risk-free.
Bitcoin is more volatile, making it much riskier than other types of investments like stocks. However, the volatility
can also make the cryptocurrency more profitable.
The knowledge required to invest in cryptocurrency and its nature as an emerging technology may add to the risk. So, how safe is it to invest in Bitcoin? Let’s lay it out for you.
Many investors are making huge sums from Bitcoin investments. One of the most important things you need
to know to be a successful investor is to find
out the right time to invest in BTC.
Here are the primary reasons it is worth investing in the coin:
In 2021, the number of Bitcoin wallet addresses will continue to increase. It has grown from about 45 million to more than 67 million within the last year. At the same time, BTC apps continue to make more money than ever. Cash App’s Bitcoin revenue skyrocketed to $ 1.63 billion in the third quarter of 2020, representing a 1,000% increase over the same period.
Bitcoin emerged in the global market against the backdrop of government bailouts, bank failures, and quantitative easing in 2009. Initially, most people ignored it. Nonetheless, in 2020 at the height of the Covid-19 epidemic, the digital currency played the role of gold. Like gold, BTC is rare. It has a hardcoded limit of 21 million coins.
Historical data shows that BTC has consistently surpassed its previous all-time high following a price crash and recovery. In the last decade, the mainstream media has reported the digital asset “dead” over 383 times. However, each time, it managed to surpass its recent all-time highs.
While Bitcoin is considered the future of monetary exchange, it’s good to note that no investment is
risk-free. This article is very helpful
if you want to learn about Bitcoin investment and associated risks.
Here is a brief take on notable points to consider:
Bitcoin’s price is constantly fluctuating. On December 17, 2017, the cost of one BTC was $20,000.
In December 2020, it was about $24,000, a 224% increase from the start of the year. At the time of
writing this article, it’s $52,340.50.
Many crypto investors are turning to stablecoins like TUSD and USDT to mitigate the risk. These coins mimic the value of government-issued currencies and other valuables like gold and oil.
Bitcoin is technology-based, leaving it open to cyber theft. Since you can’t retrieve lost or stolen coins, hacking remains a serious risk today.
Since Bitcoin is relatively new, many nations are still struggling to craft laws and regulations to protect it. Some like China have also outlawed crypto investment.
Bitcoin is a decentralized currency. However, it’s limited to 21 million coins. Moreover, only a few merchants consider it a medium for transferring value.
Since investing in Bitcoin is relatively unsafe, you need to know several things before taking
your first step.
Here are the most important things to know before buying Bitcoin:
You can exchange Bitcoin easily for fiat currencies. After choosing one of the many crypto exchanges out there, you’re good to go.
Each jurisdiction has varied sets of rules. There are high chances BTC is taxable in your country. Some countries consider Bitcoin profits as capital gains, meaning you’ve to declare it for tax purposes.
Bitcoin functions as a form of payment. With the emergence of mobile crypto wallets, you pay for lots of goods and services using QR codes. You can use cryptocurrency debit cards as well to send the coins on the go.
When you want to buy Bitcoin, ensure you find a reliable, trusted website or app. After that, all you need to do is to click on the buy button.
If you want to invest in Bitcoin, follow these four steps:
It would be best if you determined where to buy Bitcoins. Some people prefer peer-to-peer exchange platforms. However, the majority consider exchanges the best. Sign up for an account on one that suits your needs.
Once you buy Bitcoin, it’s stored in a virtual wallet. You can choose hot or cold wallets. Hot wallets are
those that are operated online by exchanges and other service providers. They are convenient and can be
free to use. However, they are prone to hacking.
Cold wallets securely store coins offline.
It would help if you linked the wallet to the bank to purchase and sell Bitcoins. Alternatively, you may have your bank connected to your crypto exchange account.
Determine the number of Bitcoins that you want to buy. You can buy fractions of a single coin. Once you make up your mind, place the order.
Now manage your coins depending on your investment strategies. You can hold the coins in your wallet to take advantage of the potential increase in value. You can also perform day trading or use the coins to make online transactions.
Like other aggregators, Swapzone works like an exchange service. If you want to exchange Bitcoin for crypto safely, follow these steps:
Can you now tell whether Bitcoin is a safe investment? Investing in Bitcoin can appear complicated and unsafe. However, if you know the right time to invest in it and ways to mitigate the risks, you can make a lot of money from BTC.