We’ve all heard stories of people investing in Bitcoin and quickly making a fortune, but few know what exactly it is and how exactly some people are able to make such extraordinarily high returns from it.
This article will tell you everything you need to know about Bitcoin and aims to help you decide whether or not you should invest in it.
Let’s start off with the basics…
What Exactly is Bitcoin?
Simply put, Bitcoin is one of many different cryptocurrencies, sometimes referred to as digital currencies.
Such currencies are virtual (you can’t get a Bitcoin note, for example) and are usually completely decentralized, so they aren’t controlled by a central bank or government, unlike fiat currency.
Bitcoin and other digital currencies are used just like any other currency, but they offer additional security and anonymity.
This has led to many scammers using Bitcoin as their preferred means of payment, as it’s very difficult to track them down and there’s no way of automatically getting a refund (as you do with a chargeback from your bank.)
Is Bitcoin a Good Investment?
While Bitcoin’s primary function is serving as just like any other currency and being used to buy goods and services, it’s best known for being a potentially highly lucrative investment opportunity.
Indeed, many people have made fortunes by investing in Bitcoin – either by simply buying and holding Bitcoin, or by trading it (buying and selling it depending on whether they think its price is going to go up or down.)
The main attraction of Bitcoin is its unrivaled levels of volatility, which make it great for generating a huge return on your investment in a short period of time. However, volatility is a double-edged sword, so it’s also very easy to lose a lot of money by investing in Bitcoin.
Ultimately, you should only consider investing in Bitcoin (or any other digital currency for that matter) if you are comfortable with the high volatility and level of risk involved.
Also, you should never invest more than you can afford to lose, and it’s generally advisable to avoid utilizing leverage (which essentially consists of your broker lending you additional money to trade with) when trading Bitcoin, as the risk is already exceptionally high.
How Can I Get Started?
If you’d like to invest in Bitcoin, the first step is deciding if you want to actively trade it or simply buy a certain quantity and hold onto it in the hopes of its value appreciating.
To trade Bitcoin, you should use a dedicated crypto trading platform which will give you access to a good selection of cryptocurrencies.
If you have limited trading experience, you’re probably better off simply buying and holding Bitcoin. To do this, you can make an account on a cryptocurrency exchange or crypto wallet, such as Coinbase, and purchase the cryptocurrency you’d like to invest in.
A Quick Summary
- Cryptocurrency investing can be extremely lucrative, but you should be aware of the high level of risk involved before getting started.
- Bitcoin is the most popular cryptocurrency in the world – and anyone can buy Bitcoin online in a matter of minutes.
- Bitcoin’s exceptionally high volatility is what makes it so potentially lucrative, but also so risky.
- You can trade Bitcoin through a dedicated cryptocurrency trading platform, and you can buy it via a cryptocurrency exchange.