Did you know that over 46 million Americans own Bitcoin? Bitcoin is one of the most liquid digital currencies and has a high return potential. Here are five things you should know about investing in Bitcoin to help you make the most out of your investment.
- Buying Bitcoin can be complicated
Bitcoin is a decentralized digital currency. This means that it is not made or regulated by the central bank or government. To purchase Bitcoin, you have to choose an exchange platform and set up an account. Consider the transaction fees, the ease of use, security, reputation, and the mode of purchase to choose a suitable exchange platform.
Next, create your digital cryptocurrency wallet to store and secure your Bitcoin. This allows you to trade them based on the physical currency selected. You should then fund your account to start investing. Visit Netcoins.ca to trade Bitcoin at competitive rates, with zero funding fees and free withdrawals.
- Bitcoin transactions are secure
With the advancement in technology and hackers finding new ways to access private financial data, it is normal to worry about the security of your Bitcoin transactions. However, Bitcoin is one of the most secure cryptocurrencies in the market. It has a publicly distributed ledger that encrypts all transactions. To decrypt the transactions, one has to solve a cryptographic puzzle, limiting access by unauthorized personnel. It also prevents incorrect valuations and falsification of data, among other threats that could cause investors to lose their investments.
- Bitcoin is a high-risk investment
Bitcoin is highly volatile, and its value keeps on fluctuating. In its early years, a single Bitcoin was valued as low as $160. In April 2021, Bitcoin’s value was $60000 and decreased to $30000 in July. One month later, Bitcoin reached an all-time high of $70000 and is now valued at $38,659.445. This shows that compared to other stable assets like certificates of deposits, Bitcoin is a high-risk investment.
Since cryptocurrency is also not regulated by the government, any money you invest in Bitcoin is at your own risk. For this reason, you should set aside cash, an amount you are willing to part with when you want to start investing in Bitcoin. This prevents you from putting all your financial assets at risk.
- It is flexible
Bitcoin has high flexibility as it is not associated with a specific institution or government. You can invest in the currency from different exchange platforms available globally. However, you will incur foreign transaction charges when you purchase via an exchange outside your home country. The transaction charges often range between 1% and 3%.
- It is highly acceptable
Most online and brick-and-mortar institutions are now accepting Bitcoin as a means of payment. Today, you can buy groceries, pay for your coffee, and shop online via Bitcoin. However, you have to cash them into your local currency first via your exchange platform to make regular transactions.
Like any other financial investment, investing in Bitcoin requires you to do your due diligence to minimize risks and make the most out of your investment. Keep the above things in mind to help you start trading in Bitcoin.