How to Invest in Bitcoin? The Basics
how to invest in bitcoin

Bitcoin has entered the world economy for good. The digital currency has been on the market for over 10 years. Its importance is growing, and with it the investment opportunities. Do you want to start the adventure with this cryptocurrency? You must know how! Here are some tips on how to safely invest in Bitcoin.

Start of investment

Often, investing in the digital currency is only associated with having it. However, there are several other ways to invest in a cryptocurrency. BTC has two main functions, investment and speculation. Bitcoin is also used as one of the methods of financial transactions. However, the most important application of BTC is primarily an investment. In addition, Bitcoin is characterised by price volatility, which is associated with ever-increasing groups of speculators associated with this market.

At the very beginning of investments in cryptocurrencies such as Bitcoin, knowledge is important. And it is education that you should focus on. There are many podcasts, Youtube videos and articles on the Internet that perfectly illustrate the essence of digital money. In CoinCasso we have created a series of publications especially for you, related to the most important concepts in the crypto world.

Check out our Blockchain Academy series and gain new knowledge. In addition, it’s also worth looking for books that will help us understand the world of cryptocurrency. It is especially worth learning about the technical side of bitcoin, the history of building its value or trading possibilities. It is also worth learning the opinion of other experts. There are many interesting discussions on blockchain technology and other crypto. Additionally, more and more events related to digital money are organized, where you can listen to lectures of industry leaders.

BTC pricing cycle

If you’ve already acquired the knowledge, it is worthwhile to look at the cycle of BTC and other digital money pricing. As the popularity of crypto grows, so does their price. Thanks to this, further groups of people are interested in cryptocurrency trading. At the end of 2017, digital money became incredibly popular. This resulted in the fact that on the crypto exchange platforms users waited several weeks to verify their accounts.

The volatility of BTC values may resemble a strong recovery and later an economic recession. The upward trend in BTC prices is strong until negative market information appears or the number of buyers drops significantly. This causes cryptocurrencies owners to decide to exit the market and further reduce their selling prices, which in turn leads to sharp declines. After a sudden drop, stagnation occurs, which in the case of this specific area, which is cryptocurrency, may last from several to several dozen months.

How do I start investing in Bitcoin?

There are 3 main Bitcoin investment opportunities. By far the most popular form is buying BTC on the crypto exchange. Buying Bitcoin on the exchange platform which is CoinCasso you can profit from the crypto value increases. Additionally, we become its owner so we can use other BTC properties. Bitcoin’s functions include payment or transport function, which consists in making transactions between entities. Often BTC capabilities are used in international transactions. Of course, you can also send your Bitcoins to your bitcoin wallet.

Investing with CFDs

The market is still developing, so there are countercurrents to the crypto difference – popular CFDs. Investments with CFDs are possible with brokerage houses. The largest financial entities in the world, such as CME or CBOE offer BTC futures. Nevertheless, an interesting solution for individual investors is investing in contracts for difference.

It consists in calculating the potential profit as the difference between the contract conclusion price and the exit price. A big advantage of this type of investment is the opportunity to take up positions for decreases by selling the contract. However, the biggest disadvantage is the risk of investment through leverage. Leverage on BTC CFDs is often much lower than on other financial assets. This is associated with high market volatility.
cfd market loss and profit

Source: Ig.com
 

Binary options

As far as the crypto market is concerned, it is also possible to invest in BTC and other cryptocurrencies with the help of binary possibilities. This consists of betting on the direction of the price in a given period of time, with a fixed payout function. This is by far the least known and used form of investment, but it is quite simple.

Mining

The crypto can be extracted by means of special equipment. It consists of acquisition by means of transaction block encryption. The main purpose of this process is to maintain the continuity of transactions located in the network. Proper preparation, especially in terms of programming, is important in mining. It is also important that the investor has the appropriate equipment.

Is it worth investing in Bitcoin?

Cryptocurrencies are an interesting form of investment, which is gaining in popularity. This new form of money changes the market. When investing, it is worth taking into account all market mechanisms. It is also important to remember about safety and proper preparation for investment in crypto. Bitcoin is a currency that certainly deserves the attention of all investors.

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Magdalena Aleksander

About The Author

Magdalena Aleksander
Junior Marketing Specialist

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