Things to know before investing in Bitcoin in 2021

Can you get rich by trading Bitcoin?

How to Invest in Bitcoin

Are you considering investing in Bitcoin?

Dear reader, we will outline some things that you need to know before purchasing.

Such as:

Basics of Bitcoin Investing

Why should it be taken seriously?

How to buy bitcoins (using a credit card or bank account)

How to properly protect and secure bitcoin if you decide to invest

Read Also: 2021: Outlook for Bitcoin Price and Its Risks

Why Bitcoin is Gaining Traction?

The world is becoming more dependent on the Internet.

So it is not surprising that Bitcoin, a secure, global, and digital currency, has captured the attention of investors.

Bitcoin is open to everyone and provides an exciting opportunity to dive into an entirely new asset class.

Investing in Bitcoin may seem intimidating, but you need to know that understanding how Bitcoin works take time and effort.

Do your research based on where you live and keep this in mind.

Note: Bitcoin with 'B' capital denotes Bitcoin to network or Bitcoin to payment system; Bitcoin containing a lowercase "B" denotes Bitcoin as the currency or bitcoin is the unit of currency.

Why Invest in Bitcoin?

To some people it seems absurd that one bitcoin can be worth thousands of US dollars.

What makes bitcoins valuable?

Bitcoins Are Scarce

Let's look at gold as a model currency. There is a limited amount of gold on Earth.

As new gold is extracted, there is always less and less gold left and it becomes more difficult and more expensive to find and mine it.

Bitcoins Are Useful

In addition to being rare, bitcoins are a useful digital asset.

Bitcoin provides a sound, predictable monetary policy that anyone can verify.

Bitcoin's monetary policy is one of its most important features. It is possible to know when new Bitcoins are created, when Bitcoin transactions are generated, or how many Bitcoins are in circulation.

Bitcoins can be sent from anywhere in the world to anywhere else in the world. No bank can block the payments or close your account. Bitcoin is censorship-resistant money.

Bitcoin's blockchain and general ledger technology makes cross-border payments possible, and also provides an easy way for people to escape from the government's failed monetary policy.

The Internet has made information global and easy to access. A healthy global currency like Bitcoin will have the same impact on finance and the global economy.

If you understand the potential impact of Bitcoin, it shouldn't be difficult to understand why investing in Bitcoin might be a good idea.

Bitcoin has a Desirable Correlation to the Market

Bitcoin is a non-correlated asset, which means that there does not appear to be a link between the performance of the traditional stock and bond markets and that of Bitcoin. 

This is desirable for traders looking to diversify risks outside of their portfolios. By adding Bitcoin to their portfolio, they can reduce the likelihood of a major downturn in stocks by negatively impacting their net worth.

Bitcoin Price

There is no official price for Bitcoin. The bitcoin price is determined by whoever is willing to pay it. Buying Bitcoin Worldwide is a good resource for current and historical price.

Bitcoin price is generally shown as the cost of one Bitcoin. However, the cryptocurrency exchange will allow you to buy any amount, and you can buy as little as one bitcoin.

Can I get Bitcoin free?

Bitcoin is money. People usually don't give money for free, so you should be very skeptical of anyone who promises to give you bitcoins for free. 

However, you can sometimes get small amounts of Bitcoin for free when several Bitcoin exchanges and interest accounts offer you to open an account on their platform. 

Depending on how much money you fund the accounts, these offers range from around $ 10 to $ 250 Bitcoin.

Can I Still Get Rich with Bitcoin?

Nobody knows, and frankly, nobody will. Anyone promising to make you rich with Bitcoin will likely fool you.

Most people still consider Bitcoin a risky investment and you should never invest more than you can afford to lose. 

However, highly volatile assets tend to have greater return potential (offset by the possibility of an incredible loss). You should always consult a licensed financial planner.

When is the right time to buy?

As with any market, nothing is certain.

Anyone's guess is as good as everyone else when it comes to predicting bitcoin prices in the near term.

Throughout its history, Bitcoin's value has generally increased at a very fast pace, followed by a slow and steady decline until it stabilizes.

Bitcoin is global and thus is less affected by the financial condition or financial stability of any country, be it good or bad.

For example, speculation about the devaluation of the Chinese yuan has, in the past, caused an increase in demand from China, which also led to a rise in the exchange rate in the exchanges established in the United States and Europe.

Ironically, controls like these only fueled Bitcoin's price further, as individuals realized that Bitcoin could do what Fiat couldn't: make cross-border payments in any amount without permission from any regulatory authority.

All of these examples demonstrate how global chaos is generally seen as beneficial to the price of Bitcoin given that Bitcoin is apolitical and outside the control or influence of any particle government.

When thinking about how the economy and politics affect the Bitcoin price, it is important to think on a global scale and not just about what is happening in one country.

Where to Buy Bitcoins?

The difficulty of purchasing Bitcoins depends on your country. Developed countries have more options and more liquidity.

Coinbase is the largest bitcoin broker in the world and is available in the US, UK, Canada, Singapore, and most of Europe.

How to Secure Bitcoins

As with anything of value, hackers, thieves, and fraudsters will all be behind your Bitcoins, so it is imperative to secure your Bitcoins.

If you are serious about investing in Bitcoin and see that you are buying large amounts, we recommend Bitcoin wallets that are built with safety in mind.

Ledger Nano X

Ledger is a Bitcoin security organization that offers a wide scope of secure Bitcoin stockpiling gadgets. We currently see the Ledger Nano X as the most secure Ledger digital wallet.

TREZOR

TREZOR is a hardware wallet created to secure bitcoins. It creates private Bitcoin keys offline. Read more about Trezor.

Only Bitcoins should be saved in the wallets that you control.

If you leave $ 5,000 gold coins with a friend, then your friend can easily run away with your coins and you may never see them again.

Since Bitcoin is online, it is easier to steal and much more difficult to trace back. Bitcoin itself is safe, but bitcoins are just as safe as the wallet they store.

Investing in Bitcoin is no joke, and securing your investment should be your first priority.

Should you Invest in Bitcoin Mining?

The Bitcoin mining industry has grown rapidly.

Mining, which previously could be done on a regular home computer, is now profitable only by using specialized data centers and devices (known as "ASIC").

These data centers are repositories full of computers designed for the sole purpose of mining Bitcoin. It costs millions of dollars today, even to start a profitable mining operation.

Bitcoin miners are not a profitable investment for new bitcoin users.

If you want a small miner to manipulate your miner, go for it. But don't treat the home mining process as an investment or expect to receive a return.

What is the best Bitcoin Trader?

Avoiding Bitcoin Scams

A sector of Bitcoin investing is knowledge of the many fraudsters and types of scams in the space. Make no mistake: because you will encounter these tricks.

How Can I Avoid Bitcoin Scams?

Although there are no hard and fast rules for avoiding scams - since those who commit them always invent new ways to make their operations look legitimate - there are a few things to keep in mind.

1. If he seems too perfect to be imagined, he probably is.

If the initial investment of $ 1,000 could make you a millionaire in two years, everyone would. 

While it may act as an ego-reinforcement for the belief that you are ahead in the game, it is likely that someone else has participated in it from below and is only aiming to pull the rug from below you. In the pyramid scheme, the only way to avoid perdition is to be on the first level.

2. Be wary of aggressive advertising

The kind of marketing that goes hand in hand with a multi-level marketing (MLM) is designed to make you feel like you are part of something revolutionary. 

Advertisers will reduce the risks and amplify the potential earnings, which is totally unrealistic. There are always risks involved in investing. Realize this, accept it, and never let anyone sell you anything "risk-free".

3. If the project's main selling point is "referral bonuses," run away

Referral bonuses are designed to make sure the money keeps flowing, while the scam itself makes little or no money. 

BitConnect's price volatility software, if it ever existed, was certainly not the primary source of income.

Referral Bonuses encourage investors to bring in friends, family, or anyone who can. While the perpetrators are enjoying your money somewhere in a tax haven on the island, you are left to explain why they lose all their money to your closest and dearest.

What is an exit scam?

An exit scam is a relatively simple (and relatively common) practice of fleeing investor money.

The fraudster might place an ICO - the initial coin offer - ostensibly as a way to fund the future growth of a venture. 

As soon as the investors inadvertently contribute enough money, the originator of the scam disappears with all that money. 

The Securities and Exchange Commission (SEC) has warned investors about the risks of participating in ICOs.

Alternatively, the operators of the Dark Net Market may take out all the money in the escrow account. Buyers and sellers do not have recourse, as they cannot go to law enforcement to help catch fraudsters.

Can I get my money back?

Sadly, it is very difficult to get your money back once it is lost in a scam. Sometimes the perpetrators are brought to justice and investors get back some of the money, but usually, the bulk of it disappears before anyone comes to trial.

The Plus Token scam is a good example that, despite six people being arrested, stolen bitcoins continue to move, indicating that the group leader is still at large.

What do I do if I suspect a Bitcoin swindler has contacted me?

Report them to the competent authorities. The best way to draw attention to a scam is to report anything you suspect is shady. 

Although the consideration of your case may take some time, and you cannot rely on overstretched or underfunded consumer protection agencies to pursue, it is better than nothing.

Additionally, you can use social media to highlight the scam, at least to those in your network.

The information above should not be viewed as investment advice. It is for general knowledge purposes only. You should do your research before purchasing any Bitcoins.

FAQ

What is the value of buying one Bitcoin?

Although there is no single price for Bitcoin, most markets with good liquidity share similar rates.

Is It Worth Investing in Bitcoin?

It really depends on whether you think Bitcoin has a future or not and that it fits your investment goals. It is best to consult a financial advisor and see if adding Bitcoin to your wallet would be beneficial for you.

What is the best investment strategy to buy bitcoin?

If you are interested in investing in Bitcoin, the best investment strategy will once again depend on your needs and lifestyle. Your financial advisor is the best person you can talk to.

However, some people like to use a strategy called "average cost in dollars". With this strategy, you can buy a little every time every day, week, month, etc. 

It is up to you to decide how often and in the quantity you buy. The important thing is to keep the same dollar amount on every purchase.

This helps to avoid getting into "everything" at a high price. Ask your financial advisor about this strategy if you're curious. There are a lot of services that cater to this strategy, including Swan and CashApp.

What is the minimum amount of Bitcoin that can be purchased?

Bitcoin investors could theoretically buy 1 million Bitcoin, but most exchanges have minimum purchase amounts that they charge themselves. 

You may need to spend up to $ 10 or more depending on the cryptocurrency exchange. Buying small amounts of Bitcoin will increase fees.

Are there investment plans in Bitcoin?

The closest thing to a Bitcoin investment plan is something like the Grayscale Bitcoin Trust, which is similar to a Bitcoin ETF.

In this arrangement, the fund owns a set of bitcoins and then sells shares in that set of bitcoins to investors. This is very similar to traditional investments.

You can also choose Bitcoin or the crypto IRA that allows you to use 401k of money to buy Bitcoin for retirement. iTrust Capital is our top pick for the Bitcoin IRA brokerage account.

Summary

It is important to understand how Bitcoin works before investing any money.

Bitcoin is still new and it may take months to realize the true impact Bitcoin can have on the world.

Take some time to understand Bitcoin, how it works, how to secure Bitcoin, and how Bitcoin differs from fiat money.