Bitcoin is a digital currency that is created electronically and held in a similar manner, it has been the most successful form of cryptocurrency and no one controls them. Its latest rise in market value has brought about a huge interest into the various ways to invest in bitcoins. In this post, we will look into the 4 ways to invest in bitcoins so you also can also be involved in this innovative financial cryptocurrency. Investing in bitcoins can take either one or two forms, that is you can purchase bitcoins with the hope that it will appreciate in value or you invest in bitcoin companies.
Buy and Hold
With this one of the 4 ways to invest in bitcoins, research is key. Buying and holding are done with the expectation that the bitcoin value will go up over a period of time as such a lot of research will be required. You will have to look at the price and speculate on whether the price will continue to rise. It is also important that you constantly check on the bitcoin market to see how well it’s performing so you do not lose out on your investment. When purchasing bitcoins for investment with this method, it is important you use reputable exchange sites. The bitcoin market is full of scam sites so take extra precaution before parting with your money. After you purchase your bitcoins, ensure that you move them from the exchange into your private wallet. With a bitcoin wallet, you can receive, send as well as store your bitcoins. You can get a wallet at Local Bitcoins or Coinbase.
This method is not the same as buying and holding as it is done in shorter time frames. From the 4 ways to invest in bitcoins, it is the most active method of realizing a profit. This is one of the most popular investment methods, it is used to buy and sell bitcoins for a profit and very relatively short intervals. In a nutshell how it works is that you buy bitcoins when the price is low and then resell when the price goes up, a lot of market speculation also goes into play.
Gain knowledge on trends of the bitcoin market as well as the price structure so as to have great trades and realize a profit. The key thing is to actively follow the market and performing thorough research. There are a lot of trading players who are well informed on the process and would not hesitate to profit off of your money should you find yourself trading without the proper knowledge. Some exchange markets allow for you to use leverage when bitcoin trading, whilst this method can help you realize great profits, look out for the great risks that come along with it.
Bitcoin Cloud Mining
Bitcoin mining is different from gold mining in that you do not require a physical location as it is done on an online network. In times past bitcoin mining required one to have massive hardware equipment for mining. Cloud mining is, however, the latest innovation and one of the 4 ways to invest in bitcoins. With cloud mining, you do not require hardware as you can effectively mine bitcoins through the cloud. This method enables you to rent mining equipment from providers and you won’t have to deal with expenses from electricity or with the cooling or storing of hardware miners.
You can use online profitability calculators to assess how much you will potentially make with the various mining providers. It is also important that you research on these companies as there are so many scam ones on the market. Ensure that you calculate how long your subscription plan will be profitable for as there are some plans that will gain you a profit in the early months and later on you will not be making as much on your investment. Take time to also research on their fees as in the long run that could distort the purpose of your investment.
There are a few platforms that allow for investors to lend bitcoins to SME’S as well as entrepreneurs. Peer-to-peer lending is one of the ways to invest in bitcoins that produces great returns on an investment. By not using the traditional financial structures, this system allows for you to lend to individuals and SME’s that are not able to secure loans from such financial structures. With this bitcoin investment method, there are low transaction fees as well as great interest returns on your investment. To ensure that you do not suffer major losses with this method, it is essential that you diversify you lending portfolio as opposed investing all your money into one transaction.