Newcomers to the world of cryptocurrency will at first be baffled about how and where to store their coins, and how to further invest it when they acquire it. But with the rising authority it’s demanding, and value it’s gaining, more and more people want to get involved in the bitcoin boom.
In this guide, we’ll take you through a few popular options for your bitcoin investment strategy, and how these different methods could end up with you seeing huge returns in traditional currency through your bitcoins. Remember, though, that investing in bitcoin is more of a gamble than a quick path to making money.
Buy and Hold
If you own bitcoins, by now you’ll know that you need at least one ‘bitcoin wallet’ (a kind of bank account to store them in). There are several options for wallets, including on your computer’s hard drive or stored on the web.
According to some, simply buying and storing your coins is a good investment option in itself. Forget trading or exchanging – the value of bitcoin is (currently) soaring without you needing to do anything. It has tripled in worth in the past year, so investing a few thousand dollars could see you make a huge return with a little patience.
The high value of bitcoin is expected to keep on increasing for now, but just bear in mind that this could change at any time. It is an entirely unregulated currency, and we’re all aware of its dramatic fluctuations.
Experts advise holding your bitcoin rather than panic-selling through bad price patches, though, as these often are temporary and have historically returned with a better value than ever.
Store in a Bitcoin Exchange
Increasingly, people are storing their bitcoin in dedicated cryptocurrency exchange programs, rather than just holding them in high-security wallets.
These programs allow you to both store and invest your coins through the same channel, cutting out the cumbersome middle men. This saves you from having to retrieve your bitcoin from a storage wallet, which can take time, before installing them in an exchange. You can instantly invest them, or convert them into traditional currency straight into your usual bank account.
Exchanges like Kraken allow you to store, buy, sell and trade cryptocurrencies all in one place, allowing beginners to craft their own simple investment strategies to start with.
Use a Trading Program
Plus500 is a site that calls itself the ‘world’s trading machine’. It is a platform through which you can invest in shares of cryptocurrency, commodities, corporations and more. It differs from a bitcoin exchange because there are many other investment options besides cryptocurrency.
Buying and selling bitcoin through a platform like this could easily allow you to cross over into exchanges of other natures, all in one place.
It includes risk management tools and regulatory news amongst other useful information, and is available on practically every device and operating system, so you can keep track of your investments anywhere.
It has a highly user-friendly interface, but will only be advisable to use if you’re a seasoned bitcoin trader with a good understanding of the stock market.
Mine Your Own Bitcoins
This way of investing in bitcoin removes the need to actually buy them, in theory. You can mine for bitcoin by joining a mining pool and sharing the task with others. Your computer will need to solve a difficult maths problem in order to complete a transaction and add it to the blockchain (a list of all bitcoin transactions, translated into code), and in return you’re rewarded with a percentage of bitcoin.
It used to be the case that you could mine on your own, but bitcoin mining operations have gotten so large now that you must join a group and even buy specialized hardware to do it.
If you’re knowledgeable about bitcoin mining, and you’ve done your research about whether it will even be profitable to you after the cost of buying hardware and the electricity consumption needed to perform it, then this could be a good option for you. Once you’ve achieved your coins, though, you’ll need to use one of the previous options we’ve discussed to either store, invest or sell them on – your strategy is up to you.
- Ian DeMartino
- Publisher: Skyhorse
- Susan Hollister
- Geneva World Publishing
- Kindle Edition
- Neil Hoffman
- Karma Publishing House
- Kindle Edition
Last update on 2019-02-19 / Affiliate links / Images from Amazon Product Advertising API