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Bitcoin has been around for ten years, and during this time, it has attracted the attention of many investors, including traders with significant financial capabilities. Investing in bitcoin is, first of all, an opportunity to invest in a reasonably reliable and in-demand currency.
Investors who have exposure and do not dispose of their assets during periods of short-term decline in demand for bitcoins receive good dividends. Compared to investing in traditional currencies, investing in bitcoin gives a higher chance of winning, due to its unique property.
Bitcoin price is determined by the desire of people to pay a certain amount of money for it. Since the total amount of bitcoins in the world is predetermined, the longer this cryptocurrency exists, the higher the demand for it, and the higher the price. Is it worth to invest in Bitcoin in 2019? Now, let’s explore the guide on Bitcoin investment with Changelly!
Bitcoin Basics Briefly
Bitcoin is the first digital cryptocurrency in the world, and it remains the most popular. Today, thousands of sellers around the globe accept this currency as payment for their goods or services. Bitcoins can also be exchanged for regular money using specific exchange points or trading platforms.
The key feature of Bitcoin is its limited supply, which protects this currency from inflation. Bitcoin emission is decentralized. The release of new bitcoins is carried out by people from all over the world using the computing power of personal computers. There is no single center for the release of this cryptocurrency.
The total number of bitcoins in the world is limited to 21 million, while the rate of mining of new bitcoins is approximately halved every four years. Therefore, over time, the creation of new coins becomes slower and resource-intensive, which means that the value of bitcoin is also growing. Concerning investing, this means that bitcoin will demonstrate a long-term increase in prices and will eventually be able to bring good profits.
Invest in Bitcoin
The risks of investing in Bitcoin cryptocurrency are primarily associated with the features of Bitcoin itself. Even though today, this cryptocurrency is decentralized, bitcoin will gradually increase the desire for centralization. Exchanges, where people sell and buy this cryptocurrency, are more and more actively influencing the bitcoin exchange rate.
Besides, the mining of bitcoins is gradually concentrated in the hands of a relatively narrow circle of people who own the latest technology, which allows you to mine new bitcoins. More and more middle-income people prefer not to go broke on expensive equipment to receive bitcoins but to mine cheaper cryptocurrencies and exchange them for bitcoins. This trend leads to the creation of some Bitcoin mining centers, which in itself threatens the decentralization of this cryptocurrency.
Another risk when investing in bitcoins is that all operations with this cryptocurrency are open. Therefore, many can see how much bitcoins were bought. In the case of the acquisition of a large number of bitcoins, there are also frequent cases of manipulation with the price of the cryptocurrency.
Finally, the anonymity of transactions using bitcoins in itself creates certain risks associated primarily with the risk of money laundering and the lack of state control over the circulation of bitcoins.
In 2019, Bitcoin has not shown any significant changes. Until the beginning of February 2019, the price continued to move in a downward corridor, for which the resistance becomes the level of $3,300
On April 2, a breakdown of the level of $4,200 takes place, and within a few hours, the price of bitcoin reaches $5,100. Subsequently, the news appears that the reason for this was the purchase by one buyer on several exchanges of 20 thousand bitcoins at once. Many consider this a signal of the return of significant players to the market.
How to Invest in Bitcoin
To become the owner of bitcoins, you need to have a virtual wallet on which cryptocurrency will be stored. There are wallets for mobile devices (Copay, breadwallet, Mycelium wallet, Freewallet), for desktop computers (Bitcoin Core, Armory, Electrum), hardware (Trezor, Ledger) and online wallets (BitGo, Green Address).
If you are going to perform operations with bitcoins regularly, wallets for mobile and desktops are more suitable for you. If you invest a significant amount in cryptocurrency for the long term, then you need reliable hardware devices and wallets on your computer. The wallet needs to be installed and activated.
Buy Bitcoin at the Best Rate
The Changelly platform offers you a way to buy BTC with your banking card swiftly, safely, and with minimal authentication procedure. The fiat payment process is powered by our partner Indacoin and takes just a few simple steps to take.
The purchase option is open both via our website and the Exchange Widget that can be found at our partners’ resources.
Where to Invest?
It would seem that Bitcoin is a decentralized cryptocurrency, and the law is not written to the holders. However, there are countries in which it is more profitable to buy and store bitcoins than anywhere else.
For some countries, the modern way of paying with digital currency is a threat. They introduce a strict prohibitive or restrictive cryptocurrency policy. However, there are countries that are positive about modern monetary technologies.
First of all, Malta is one of these countries with a low business fee for residents (only 35%). Binance cryptocurrency exchange moved its headquarter to Malta, which indicates this country as crypto-positive.
Next is the Bermuda Islands. It is famous for the lack of VAT, income, and many other taxes. The payroll tax is no more than 10%. More than 15 thousand companies are registered on the Bermudas, including a part of Google.
When we talk about money, we should mention Switzerland. One of the cities, Zug, is proclaimed as Crypto Valley, in which the government accepts bitcoins as payment for utility bills.
Slovenia is also a great place to associate with cryptocurrencies. By the way, Bitstamp exchange was founded in Slovenia. Slovenian government does not tax bitcoin as money or securities.
We know many companies registered in Singapore: Litecoin, CoinHub, TenX, etc. The country has controversial legislation towards cryptocurrencies. However, Singapore banks claimed to be very cryptocurrency-friendly.
Georgia is in the second place after China by the highest mining hashrate. The taxes (btw, there are no VAT taxes) are meager.
In Hong Kong, Bitcoin is a virtual commodity. Cryptocurrencies are not regulated here. In contrast to Singapore, the government of Hong Kong is more friendly to cryptocurrencies than national banks.
Best Time to Invest in Bitcoin
Interest in investing in bitcoin grows when the cryptocurrency rate rises, as many investors invest in further growth of the price. You should wait for the moment when the cryptocurrency rate drops, and buy it at this time.
When you reach the desired percentage of profit, then you can sell cryptocurrency. You earn on the difference.
Please, check out our latest Bitcoin price prediction for the next couple of years to be sure, when to buy and sell the cryptocurrency.
Investing in Bitcoin (BTC) Mining
In addition to the traditional trade in bitcoins and holding them in order to wait for the appreciation, you can also invest in equipment for the “extraction” of cryptocurrency. Each Bitcoin is a digital code, which requires specialized equipment.
Moreover, the capacity of the equipment is growing exponentially in parallel with how the rate of release of new bitcoins slows down. Having invested money in the purchase of equipment, you can start earning your own bitcoins in order to sell them when the cryptocurrency rate rises even higher subsequently.
Some services offer to receive bitcoins for specific actions, but this method can hardly be considered as a full-fledged investment.
Bitcoin ETF & U.S. SEC Approval
The wait for Bitcoin ETFs is virtually endless. The Securities and Exchange Commission (SEC) has rejected one by one offers for Bitcoin ETFs since 2014. The absence of regulation has a controversial impact. Firstly, it makes cryptocurrencies improve and develop. However, сryptocurrencies require regulation at the state level to avoid fraud. At the same time, the adopted rules should not oppose the development of cryptocurrency.
In Japan and South Korea, after a series of significant hacker attacks, some measures were taken. For example, the Japan Financial Services Authority (FSA) has implemented security measures on cryptocurrency exchanges in the country after the NEM hack. The agency encourages cryptocurrency organizations to develop methods and guidelines for self-regulation. So the general exchange of information between exchanges was adopted.
Something similar is happening in the United States. The Winklevoss brothers were the first to apply for a Bitcoin ETF. They also created the Virtual Commodity Associations (VCA). This organization exchanges information on cryptocurrency exchanges.
According to analysts and professionals, the SEC may take from nine months to a year to approve ETFs for bitcoins.
Here are the best ways you can invest in Bitcoin:
- Investment in funds. Funds have a lot in common with banks. By investing in funds, users open a kind of deposit and make a profit from Bitcoins. Investment in funds has a significant drawback. They do not guarantee a stable profit.
- Pools and cloud mining earnings. When renting computing power, you do not need to invest in equipment and configure special programs. However, the mined coins, in this case, are redistributed between all participants in the pool that were involved in the opening of the block. You will also have to pay a commission for the rental of capacities.
- Trading on exchanges. Trading on the exchange is associated with certain risks. Only traders who can analyze the market, work with indicators and charts, and know all the tricks of the trade can make good money. You need to register on one of the resources, replenish your account and start trading. Some resources allow you to deposit in fiat (dollars, euros).
- Interest deposits. This method of investment appeared relatively recently, but all cryptocurrency resources immediately drew attention to it. Interest-bearing cryptocurrency investing resembles a usual deposit in a bank: you make a deposit for a predetermined period (or on an unlimited term), for which service charges a certain percentage of the invested amount.
- Investing in new cryptocurrencies. In addition to Bitcoin and other popular coins, you can invest in new tokens. You can make good money on them, and invest the earned amount in the purchase of bitcoin.
Bitcoin is currently free of increased control and pressure. At the same time, states have full control over fiat money. Keeping funds in the bank means increased transparency and openness of your finances to regulatory authorities. High commissions on banking operations and a small percentage on a deposit make such investments unattractive for most users.
At the same time, the storage of Bitcoin is free, operations with it are not controlled by government bodies, and the transaction cost is much lower compared to bank transfers. The Bitcoin network is decentralized and anonymous.
The best option to start your work with digital assets is mining. However, Bitcoin mining requires expensive equipment and high energy costs. They will pay off not earlier than in a year and a half. In this regard, users are looking for simpler and faster ways to make money on cryptocurrency. They can face high risks.
There are no guarantees of profitability and even fewer guarantees of break-even investments. Users who intend to work with digital currencies must understand all the risks and have a clear action plan for all scenarios.
Do not invest more than you are willing to lose.
Disclaimer: This article should not be considered as offering trading recommendations. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor should research multiple viewpoints and be familiar with all local regulations before committing to an investment.