Investing in Bitcoin as a Way to Save Money

Investing in Bitcoin as a Way to Save Money

When planning the placement of available funds, you should first decide on the goal — to protect against inflation or increase capital. The choice of instruments in terms of their risk/return ratio depends on this. In addition, the choice of assets in the formation of the investment portfolio is affected by the number of funds, as well as the investment horizon, i.e., the planned term for the allocation of funds.

Cryptocurrency investments

Some experts call cryptocurrencies a soap bubble, while others predict an unprecedented growth for them. You can relate to them differently, but they are an existing reality that can be taken into account in your investment strategies. However, one should also take into account their strong volatility (an increase/decrease in the bitcoin exchange rate of more than $ 1,000 per day has long been the norm) and the very conditional legality of operations with them. Also, certainly, you should not invest all your savings in them. Many people have already managed to participate in cryptocurrency games. However, the collapse of the bitcoin exchange rate has cooled most investors.

With a successful set of circumstances, you can quickly get noticeable profitability with the growth of the selected cryptocurrency. On the other hand, operations with cryptocurrencies remain highly risky, and when exchanging cryptocurrencies for fiat money, commissions of up to 10% take place.

Benefits of investing in cryptocurrency

Many people cannot decide whether to invest in bitcoins because digital currencies have not yet wholly entered the legal field of most states. According to many experts, today investments in bitcoin can be assessed as risky, but highly profitable.

The features of the coin include:

• Lack of a single emission centre, non-attachment to a specific financial organization that exercises control over the currency.

• Commissions are taken only by exchanges and wallets.

• Anonymity. Creating a cryptocurrency wallet, the user does not indicate his personal data, and when transferring funds from one wallet to another, third-party persons will be able to see only encrypted wallet addresses on the blockchain.

• Irreversibility of transactions. If the money leaves the account, it is impossible to return it even if the transfer is mistaken.

• Coin issue is limited to 21 million units, most of them have already been mined. This means that the value of crypto will only increase in the future.

Key digital coin investment strategies

Experts point out two main strategies on how to make money with bitcoins with investments; they are generally similar to working with traditional funds. Choosing the right approach depends on the investor’s ability to “freeze” a certain amount of funds for a long time or willingness to engage in trading on a regular basis.

The positional strategy is also called “in-store.” This is the simplest scheme available even for beginners. Its meaning is to buy coins for fiat currencies and wait for appreciation. Those who bought Bitcoin several years ago have already received excellent earnings, given the cryptocurrency cost increase tenfold. The investor needs to maintain endurance and not to merge their assets in case of exchange rate fluctuations, which happen very often.

Trading on a cryptocurrency exchange. This investment in bitcoin is usually short-term. However, before investing in bitcoins on trading floors, you need to assess your strengths soberly. For beginners, at first it can be a daunting task, you will have to study on small amounts. Those who have experience trading Forex or binary options will be easier. It should be borne in mind that not all exchange principles and tools are applicable to the cryptocurrency market.

There is also another option where to invest bitcoin. We are talking about blockchain projects that are exposed at the ICO. Put simply, the company offers the community a promising product, which needs money to be finalized and implemented. Potential investors study the offer and buy tokens specially issued under the initiative, which can later be traded on the cryptocurrency exchange. The more money raised, the more promising the project and the more expensive its tokens are.

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