Is Bitcoin Worth Investing In?

2017 started off well for Bitcoin, as it has reached the $1 000 mark, and shows absolutely no signs of slowing down. I get emails from people very often asking whether or not this cryptocurrency is the only one worth investing in, and, to tell you the truth, the answer is not as simple as you may think.

Before I open up this conversation, I want to make sure that it is understood that Bitcoin is neither a stock nor a company –it is a cryptocurrency. If you are considering investing in it, it is vital that you understand that you will essentially be buying currency, although there are other ways of investing in it too. These include buying and holding, trading, investing in Bitcoin mining, or investing in companies that accept Bitcoins.

A growing number of internet-based businesses now accept Bitcoin, and you are able to transact using this cryptocurrency at an online casino, online retailers, travel companies and to purchase other online services. The more companies that accept it, the greater the demand, and many hope the greater the value.

Buying and Holding Bitcoin

The most common method of investing in Bitcoin is to buy it, hoping that its value will appreciate. This decision requires you knowing when the best time is to buy, meaning when do you feel the price is at the lowest it is going to be, and will thus make for a good profit when you eventually sell it at a later date.

Don’t rely too much on the free advice people are so eager to hand out when it comes to something they know nothing about, and focus instead on ways to make this decision on your own. Do your homework, investigate what you need to and learn as much as you can about this cryptocurrency so that you can come to your own conclusion –bearing in mind, of course, that this too is advice, and you should take it with a pinch of salt as well.

Pointers for Buying and Holding Bitcoins

  1. Don’t ever invest more than you are willing (or able) to lose. Bitcoin is a risky investment, as most of those which promise high payouts are, and it is essential that you keep this in mind at all times.
  2. After you have bought your Bitcoins, ensure that you move them into a personal wallet belonging to you –don’t ever leave them at the exchange. I personally recommend using a hardware wallet to store them. If you can’t afford one yet, try a paper one until you can.
  3. Only buy your Bitcoins through exchanges that have proven reputations.
  4. Buy your Bitcoins through Dollar Cost Averaging. This means that you don’t purchase all of them in one trade, and instead acquire a fixed amount of them every day, week, or month over the year. This allows you to average the price out over 12 months.

A Multi-Faceted Answer to a Simple Question

By now you have probably come to the conclusion that the answer to the question I posed at the start of this article is not a simple one –it is not just a matter of should you invest in Bitcoin, it also involves the different methods of doing so.

The only way to find the answer is to educate yourself: learn about Bitcoin, learn about what factors affect it, what advantages and disadvantages this cryptocurrency brings to the table, and hold off making decisions until you have armed yourself with the knowledge required.