Are there any specific ways in which you can invest in Bitcoin? What are the unique characteristics of each investment approach? If such are the questions that you have been asking yourself, then you are in the right place. Herein, I will be discussing the best approaches you can rely on to make investment income from Bitcoin. Some of the main areas I will highlight include:
- What are the characteristics of Bitcoin as an investment asset?
- The best approaches to invest in Bitcoin
Everyone has their own perception of Bitcoin. As much as there are common beliefs that are held by investors, there are those bits of information that we all process differently when it comes to the interpretation of what Bitcoin stands for. that said, however, we cannot dispute the fact that Bitcoin has been the source of financial prosperity for a significant number of people, and the cause of poverty for some other people. What made these people decide to invest in Bitcoin? Let us get right into discussing this without further ado.
What are the characteristics of Bitcoin as an investment asset?
One major characteristic of Bitcoin is that it is a very volatile asset. It is probably the most volatile asset in the current day and time. The rate at which the price of Bitcoin rises and falls is quite different from what most investors are used to.
- In December 2018, 1 BTC was valued at $3819. By June 2019, 1 BTC was valued at $12000+. That is an example of how fast the price of Bitcoin can rise.
- In December 2017, the price of 1 BTC was $19000. By November 2018, the price of Bitcoin had fallen to $3800.
Any time there such major fluctuations in any currency, investors stand a chance to make lots of money or to lose equivalently large amounts of money. All that one has to do is to purchase large amounts of cryptocurrencies and make a currency exchange at the right juncture. Making such exchanges calls for caution since there are many companies out there claiming to offer such services but they do not well-equipped to do so. the person purchasing the cryptos is the one who ends up losing their money by relying on such companies.
One can, however, rely on a company such as Coinbase, which recently partnered with Regal Assets to deliver a wide range of cryptos and digital currencies to investors who rely on IRAs as investment vehicles. With such a company, you can purchase your cryptos and invest them through the approaches described below:
The best approaches to Invest in Bitcoin
Buy and Hold
Long-term investors can make massive gains by simply buying and holding Bitcoin. This is known as hodling in the crypto-world. If you choose to rely on this approach, then you have to be ready to overlook the short-term volatility. All investors who purchased Bitcoin in 2009 and have held on to them despite the fluctuations in the price of these cryptos are more than 7000 times richer owing to the growth of the value of these assets.
If you are interested in buying and holding cryptos in a safe and reliable company, then you can rely on Regal Wallet. This platform allows you to buy and hold your cryptos in a Bitcoin IRA, as you wait for their value to increase. Regal Wallet is offered by Regal Assets, which is a very efficient company that does not have any customer complaints on consumer trust sites. Such is a company that you can bank on to see to it that you retire with a valuable asset in your IRA portfolio.
2. Long positions
If you are a short-term investor, you can also make immediate returns through purchasing Bitcoin and cashing them outright at the end of the price rally. You can rely on the volatility of the cryptos for a higher rate of return. If the market moves in your favor then you stand a chance to make huge gains. This is exactly what Bitcoin day traders are doing. There are many crypto trading platforms that are offering multipliers – these companies simply lend you money so that you can increase your returns.
Every time there is a pandemonium arising from political and economic factors, there are investors who bet on the value of bitcoin plummeting. These investors (the short sellers) then proceed to borrow cryptos when their value is perhaps $90 and later sell it back to another investor at this price. When the value of Bitcoin decreases (to about $60), the investor who bought the cryptos from the short-sellers are likely to dispose of the cryptos by immediately selling them back. This way, the short-sellers end up making a profit that is equivalent to the difference between the original price and the lower price at which they bought back the cryptos.
The danger of this approach is that the market can move against you. When this happens, you can lose huge amounts of money. One can, however, bank on concepts such as leverage trading and margin calls to make large amounts of money through the short-selling approach.
Bitcoin is a very volatile asset that can either make you rich or poor in a very short period. if you are to make any significant gains, then you need to educate yourself about cryptos and how they function. If you rely on the services of a company such as Regal Assets, you will have a greater advantage over your fellow crypto investors, since this company takes client education very seriously. By the time you are creating your Bitcoin IRA on Regal Wallet, you will be educated enough to know what you are getting yourself into. On the overall, you should know that every asset bears a certain amount of risk, and it is up to you to decide how much of that risk you can bear. Of the three methods I have listed above, my preference is the buying and holding of cryptos. If you can tactfully overlook the short-term volatility, you can make massive gains in the long-term horizon.
I hope that you enjoyed this article about the 3 ways to invest in Bitcoin and that you are in a better position to make a more informed decision. Feel free to express your thoughts in the comments section, and to also drop a question if you have any.
I wish you success!
Eric, investor, entrepreneur and team member of Gold Retired.