Learn how to invest in bitcoin 2020. Acquire the knowledge and know-how necessary to invest in the world of cryptocurrencies by reading up on how to invest in Bitcoin. You’ll learn expert tips on how to effectively navigate the exciting and emerging world of cryptocurrencies.
So, how can you get your hands on some of these? The easiest way to buy or sell digital currency is through an online platform like Coinbase, which is the most popular cryptocurrency platform in the world right now. With its super simple interface, it is very easy for first-time buyers to buy Bitcoins.
“Investing in crypto currencies and Initial Coin Offerings is highly risky and speculative”
It’s just like using any other online investment marketplace. First, you create an account or “digital currency wallet” where you can safely store your money. It’s not safe to store your cryptocurrency on an exchange wallet since you don’t have an access to your private key. But it’s convenient if you are trading every day.
Next, connect your bank account so that you can exchange local currency into a digital currency. Boom, you’re done. You can start buying and selling currencies. Coinbase currently allows its customers to purchase and sell three of the most popular cryptocurrencies – Bitcoin, Litecoin, and Ethereum.
When managing your bitcoin investment, there are several smartphone apps you can use to make your life easier. In this guide, you will discover the top ten best bitcoin investment apps that you can use in 2019.
This is not investment advice, just what I’ve done. Please don’t do something silly like mortgage your house and put it all in crypto just because some guy on the Internet wrote an article.
At the beginning of 2017, with cryptocurrencies like Bitcoin and Ethereum gaining in value and popularity, I decided I wanted to put some money into the market but wasn’t sure when to do it.
Ethereum had spiked to an all-time high of $40, and a number of people in the space were saying it was going to crash back down. Bitcoin was around $1200, and people were saying the same thing.
They both did come down a little, but since then, Ethereum has almost 10x’d in value, and Bitcoin has gone up about 4x. If you had bought either you would have done extremely well, but it’s impossible to accurately predict these things.
For someone just getting interested in cryptocurrencies, there’s the question of when and what to buy. Putting everything you want to invest into one coin at one time isn’t a great strategy since then you’re relying on that one coin to do well from that one point of time. It’s very, very risky.
An index fund, for those unfamiliar with the term, is a collection of assets bought together to offset the variability of any one asset. You could gamble entirely on Ethereum, Bitcoin, Litecoin, Dogecoin, but you risk that one coin crashing. Instead, it’s safer for less-educated investors to spread out their risk across multiple assets. In this case, buying a collection of coins, probably starting with Bitcoin and Ethereum, and adding Litecoin if you’re interested.
That accounts for your risk among different assets, but you also want to account for the volatility over time. You could buy them today then have them all crash tomorrow, or you could have them go down for a month only to rebound to double what they are now and end up missing out on buying them at their lower prices.
The best way to account for this is through dollar cost averaging, where instead of putting on all your money at once, you spread your buys out over time to account for the variation in daily or weekly prices, while still getting most of the long term benefits of the investment. Your gains won’t be as high as if you perfectly time the market, but they’ll be much higher than if you mis-time the market, and you’ll protect yourself from avoiding buying on the downturns out of fear.
Typically, you dollar cost average when buying stocks by buying them monthly, but since cryptocurrencies are moving so quickly, you could buy them in weekly or even daily transactions. I’ve been doing weekly since the beginning of the year.
How to use Bitcoins to buy things
If you acquired some digital currency you might want to spend it at some point but where can you use it? Who accepts this imaginary currency as payment? What makes it worth anything?
Same thing that makes a dollar worth anything. A bunch of people got together and agreed that it had value. Without that, it’s just a piece of paper. If you and I agree they have value, I can buy your TV for some magic beans.
Silk Road was an anonymous online marketplace for illegal drugs. They accepted Bitcoins because they are so hard to track and that’s one of the things that helped the currency gain traction.
However today more business are accepting Bitcoin as a form of currency. You can buy and sandwich at Subway, sign up for Ok Cupid or buy a new couch on Overstock with Bitcoin but don’t try and buy bananas at your corner deli. Here is a list of other companies that accept Bitcoin as payment.
In the early days of Bitcoin, users could mine Bitcoin on laptops and desktop computers, earning copious amounts of Bitcoin at drastically lower values than what they are today. As such, early mining in Bitcoin turned out to be one of the most lucrative investments ever. However, mining has evolved into a giant industry, where outsized companies like Bitmain and large mining pools like F2Pool and BTC.com dominate the market.
ASIC miners are really the only feasible way to mine Bitcoin today, and hosting your own ASIC rig is a serious investment that requires hardware costs, operating time and electricity. Further, small, independent miners using home-based rigs often have to operate at losses during extended depreciations of Bitcoin’s spot price as profit margins are diminished. However, if you wish to try your hand at Bitcoin mining, there are numerous tutorials for discerning which hardware and software suit your needs and budget.
Cloud mining services also enable users to purchase contracts for ASIC mining rigs within extensive mining warehouses that are operated by a third-party mining company. These companies offer regular returns based on your investment and can be convenient if you wish to earn Bitcoins through mining but do not want to go through the hassle of setting up your own rig. Hashflare and Genesis mining are two popular cloud mining services.
Bitcoin’ mining market is a fascinating component of its broader ecosystem, and adequately understanding how it works, as well as watching its future development is vital to comprehending the legacy cryptocurrency’s larger economics.
So the best way to start investing in cryptocurrency as someone who’s inexperienced is to buy a collection of coins, not just one, and buy them at regular intervals in smaller amounts instead of buying them all at once.
Here’s how I’ve been doing that:
First: Open an account with Coinbase. You can use other exchanges for this too, but Coinbase is the one I’m most familiar with.
Second: Set up a purchase for Bitcoin, Ethereum, and Litecoin, at whatever amount you want to invest, to recur weekly. I’ve been doing a ratio of 2:2:1 of Bitcoin : Ethereum : Litecoin and it’s been working out well.
Third: Let it run and don’t touch it! As long as you can ride out the ups and downs, if the prices of these coins increase over time, you’ll be exposed to a lot of the upside without having to take the risk of trying to perfectly time the market.