Cryptocurrencies news are all over the internet with their headlines. Is it a good idea to start investing in Bitcoin? Digital currencies increase but also drop, that is a natural process. There are always some new changes but that doesn’t put off big tech companies like Amazon, IBM, and Tesla.
Bitcoin explained
The concept of digital currency is a complicated subject matter. Most people are just familiar with doing a money transaction from one bank to another. Bitcoin operates slightly differently from normal currencies. It’s a peer-to-peer payment, where banks are not involved in the transaction process. There is also no physical version, just a digital asset. Every Bitcoin is mined or created to use an encrypted code, which includes just letters and numbers. The equation is used also to create a code (virtual key).
Important facts about Bitcoin:
- Blockchain technology is used to send data
- Every Bitcoin must be mined
- Bitcoin is finite: 21 million in total can be mined
- Many platforms allow Bitcoin purchases
- “Decentralized” means not being regulated to a financial bank system and government
Things that should be considered before investing
Every investment comes with potential rewards and risks. In comparison with familiar types of investments like stocks, crypto is especially risky. Before you are going to invest, it is recommended not to use all the life savings in the first place and invest a small amount. The golden rule is not to invest more money than you can afford to lose. See it as a long-term process. If there is not enough money left at the end of the month, steer clear and focus on your savings.
Pros: Cryptocurrencies global, means that they got the same value in other countries without any exchange rate.
Cons: Cryptocurrencies are of utmost volatility and very risky. It has been reported that it takes time to cash out money because of technical issues.
Bitcoins are still not approved as an official currency, so it is not possible to pay with it anywhere you want. Only a few businesses accept these payments, in general, it is more used between bigger companies. For example, there are Bitcoin casinos where it is possible to play with mined coins. There is a list of the best betting sites, which count to other secured platforms where your coins can earn you something like a bonus for example. There is a wide range of sports like football, horseracing, and water polo, etc. This makes the whole experience enjoyable because it connects hobbies and interests.
However, Bitcoin is a promising investment, and you shouldn’t miss the chance to get more into these technologies. Alternative Coins (Altcoins) are full of potential as well, that’s why a lot of people invest in many coins to build a crypto portfolio.
Questions that I should ask myself before investing
If you are willing to take the risk of investing in Bitcoin, make sure that you understand what you are doing and have a strategy. Ask yourself these questions before getting involved:
- Do I know how Bitcoin works and know what exactly I am investing in?
- Is the level of risk understood?
- How is the Bitcoin price right now compared to a few months ago? What is the reason for investing now?
- Is there evidence or a sign that prices are going up again during research?
- What is my knowledge level of cryptocurrency so far?
- Do I keep myself updated?
If you can answer these questions, it’s a good idea to invest!
Ups and Downs
One thing for sure: Bitcoin is extremely volatile. Since December 2020 Bitcoin went through a rollercoaster ride with many ups and downs. So, nobody knows when the next Bitcoin crash is coming. That’s why it is important to stay updated, read crypto news daily and educate yourself. Factors for these vibrations are that the demand grows, and the supply is still limited. Also, media hype, a world of politics, ICO hype and acknowledgment by tech-developed countries play a big role in that.
Future of Bitcoin
The senior market analyst Fiona Cincotta believes that the Bitcoin price could rise to $80.000 this year, forecasts are still tricky to interpret because Bitcoin is hard to evaluate. An all-time high of $100.000 or even more is expected by crypto-market experts by the end of the year. The future of Bitcoin along with Altcoins looks promising. Technology is rising and crypto is evolving. Not a while ago Visa partnered up with cryptocurrency exchanges that allow debit cards to earn crypto rewards. Visa is moving forward and is evolving a network and solutions when it comes to connecting crypto and blockchain. Other companies that are also adopting Bitcoin are Mastercard and PayPal. Investing companies are showing interest as the Bank of England for instance or BlackRock, the world’s largest asset manager. Rumors are telling that Amazon will be the next tech company that will accept Bitcoin payments by the end of 2021. Amazon is planning to launch its own cryptocurrency too. Let’s see what the future holds!
