Bitcoin has been very good to its investors. Last July, you could buy bitcoin for less than $10,000 per coin.
One year later, it is trading for three times this amount. At its peak, bitcoin traded at over $63,000.
The good news is there is a fresh opportunity in the bitcoin space. The price has decreased due to Covid-19 fears, but you can now get in at a much lower price than the peak.
Read on to learn all about investing in bitcoin. Explore five tips for bitcoin investments that are certain to help you make money.
1. Defining Bitcoin
Before investing, it is important that you answer the question of what is bitcoin? Bitcoin is a digital or virtual form of currency. The grand vision for bitcoin and other cryptocurrencies is to replace traditional forms of money.
Bitcoin is decentralized meaning there is no government or corporation behind it. One of the many perks of bitcoin is that it is powered by blockchain technology. There is an encrypted and anonymous ledger that makes bitcoin transactions ultra-secure.
2. Follow the News
Bitcoin and other cryptocurrencies are speculative. You will not find quarterly sales figures or profit loss statements.
In many ways, bitcoin is driven by the news and current events. Bitcoin is growing increasingly mainstream which is a positive development for investors.
Major corporations are now accepting bitcoin as a legitimate form of payment. Athletes and celebrities are signing contracts that pay out in bitcoin. All of these stories bode well for bitcoin as they suggest societal roots and staying power.
3. Fixed Supply
Bitcoin is unlike many other cryptocurrencies because it has a fixed supply. Cryptos such as dogecoin or litecoin offer an unlimited supply.
On the other hand, bitcoin, is capped at 21 million coins. Each new coin added to the supply follows a meticulous process called bitcoin mining.
4. Bitcoin Benefits from Global Calamity
Many investors view bitcoin as a hedge against traditional currencies. Bitcoin and other decentralized forms of currency benefit when the U.S. Dollar struggles.
For example, the U.S. credit rating is in question due to rising amounts of debt. A rating decrease would negatively impact the U.S. Dollar. This creates a surge of investment in bitcoin as a safe alternative to a currency in turmoil.
5. Buy the Dips
Bitcoin is a volatile commodity. It deals with big price swings both up and down.
You stand to benefit from buying the dips. Over the years, bitcoin has demonstrated staying power and the price eventually returns.
You can profit immensely by taking advantage of these buying opportunities. There is even room for bitcoin in your short term investments. Some bitcoin investors sell during price spikes and take the profit before it dips again.
Five Tips for Investing in Bitcoin
The global financial community is accepting bitcoin in a rapid fashion. Do not let the bitcoin wave pass you by without taking advantage.
Use our tips such as buying price dips and capitalizing off global calamity to get rich. There is no telling how high bitcoin may go. If you enjoyed this article about investing in bitcoin, check out our blog for more great content.