Is Bitcoin a good investment long

Nov 05,2022
Is Bitcoin a good investment long

Is Bitcoin a good investment? In the pastten years, crazy skyrocketed around Bitcoin and a sharp decline. It isdifficult to predict whether this cryptocurrency will be a global reservecurrency or a widely accepted value storage method like gold. Bitcoin isundoubtedly a revolutionary technology. Compared with 2012, its risk after 2022is much smaller. Let s take a look at whether it is worth investing in Bitcoin. What arethe investment methods of Bitcoin?


History of Bitcoin

Since its establishment, Bitcoin is thefirst digital asset to generate the current cryptocurrency ecosystem. The whitepaper described after the financial crisis in 2008 described the technology wasa quiet start of the cryptocurrency revolution. For a long period of time, ittrained a group of underground investors that regarded them as a possiblealternative to the physical currency system. Bitcoin has now become a householdname, because institutions and governments are developing methods to meet thegrowing exposure needs of customers.

Similar to the Internet is a speculativeinvestment, Bitcoin has also been criticized. In fact, Bitcoin's currentadoption rate exceeds the Internet in 1998, and millions of people now have Bitcoin.And it seems to be getting larger and larger.

In 2021, Salvador became the first countryin the world to make Bitcoin a legal currency; Paraguay and other smallcountries hope to follow suit. Salvador is also the first and only country tohave Bitcoin in its state treasury. As of early 2022, Salvador had 1,800bitcoin. President NAYIB Bukele announced his purchase on Twitter withoutavoiding it.


Cryptocurrencies are not traditionalinvestment

During the popularity of COVID-19, aspeople who maintained social distances at home began to get involved in onlinetransactions, the cryptocurrency market began to explode. Value has soared to adazzling height, but it has dropped sharply this spring. Bitcoin reached a peakof $ 69,000 in November 2021, but now hovering less than one -third of thevalue.

TerraUSD is a stable currency, and itsvalue should be linked to the US dollar through complex algorithms. However,when it became mentally confusing in June, it burst into an amazing way, andnow it is basically worthless.

The U.S. government is currently studyinghow to supervise digital assets to protect investors and make full use ofdevelopment industries including NFT, irreplaceable tokens, and"decentralized" digital coins. In June, senators Cynthia Lummis andKirsen Gillibrand proposed two -party legislation.

The bill is still a long way to go to thelaw. It will regard most cryptocurrencies as gold and other products, notstocks or bonds. It will also impose stricter regulations on stablecoins,prohibiting the algorithm -based stablecoin, such as the TerraUSD token with alot of fate.


Despite risk, is Bitcoin a goodinvestment?

Similar to any speculative investment,there is obviously major risks to buy Bitcoin. With the traditional financialcommunity aware of the subversion of Bitcoin, they must choose to usecryptocurrencies or face irrelevant issues. Its fluctuation risk is one of themain factors to determine whether Bitcoin is a good investment, but it is notnecessarily good or bad. Personal decision to invest in Bitcoin depends on yourpreferences for risks and your views on human future. For example, Russia saidthey are studying cryptocurrencies to reduce their dependence on the US dollar.Bitcoin may subvert the US dollar in a huge way. It is too big in this regardand cannot be ignored. If this damage is successful, Bitcoin may be a greatinvestment.

The main reason for traditional investorsto contact Bitcoin is hedging inflation and potentially collapse based on thelegal economy. The volatility of Bitcoin is a matter of possible investors'attention, but as institutions and governments enter the market with long -terminterests, it is expected that the volatility will always decline.


Bitcoin wants to be assets like gold

Bitcoin has existed for 13 years. It is theoldest cryptocurrency among more than 18,000 cryptocurrencies with the highestmarket value. Primitive cryptocurrencies account for more than 40% of thevaluation of the cryptocurrency market.

At present, more than 19 million Bitcoin hasbeen mining, with a maximum limit of 21 million tokens. This idea is that thislimited supply will mean that Bitcoin will maintain its value like otherproducts such as gold, and at the same time decompose with the rise and fall ofthe stock market.

However, the system has been criticized forits environmental impact, excavating computers required for new token, and alarge amount of energy for consumers who maintain blockchain consumers. Themethod of working in the Bitcoin algorithm also means that it takes longer toconfirm that the transaction may be performed than the transactions performedthrough more mature routes.


Can Bitcoin be exchanged for real money?

Bitcoin can be converted into cash inseveral different ways. You can sell Bitcoin on cryptocurrency exchanges suchas ETORO or Cash will be stored directly into your bank account.This is a simple way to convert your Bitcoin into cash, but you must rememberthat the price of Bitcoin has been changing. Yes, you may need cash, but if theprice of Bitcoin has soared again and again, you may kick yourself in a fewyears.

Bitcoin ATM is expensive, but if you haveone near you, you can exchange Bitcoin there. However, these ATMs usuallycharge high fees, so the use of exchanges is likely to be much better.


Is Bitcoin a good investment?

As the agency adds Bitcoin to their balancesheet, Salvador officially regards Bitcoin as a legal currency. It seems thatBitcoin may be the future of the currency, or at least a recognized valuestorage method. However, due to the large market fluctuations, investors whoavoid risks still hesitate to buy Bitcoin, let alone buy any othercryptocurrencies.

Because Bitcoin is not controlled by thecentral entity, its monetary policy is much better than any government. CathieWood, the CEO of ARK Invest, describes Bitcoin as "rules -based currencysystem" because Bitcoin's monetary policy is set by code parameters. Inview of the popularity, the government printed more funds than ever, andinvestors are looking for alternative investment to hedge inflation. Manypeople are turning to Bitcoin to promote the use of cryptocurrencies for a longtime.

Is Bitcoin a good investment? As long asyou invest and invest wisely, you can. However, if investors try to treat Bitcoinlike any other assets, they may turn Bitcoin into a bad investment.


How to make money by investing inBitcoin

Like any investment, making money dependson the price of your sale of assets. If you sell when your price is higher thanwhen you buy it, you will make money.

If you sell at a price below the purchaseprice, you will lose money.

For example, if you invest in Bitcoin atthe beginning:

It will be sold on December 31, 2020, andyou will get 300% profit

It is sold on December 31, 2018, and youwill lose 73%

The volatility of Bitcoin is extremelystrong, so the trick is not to panic, and it is unavoidable to clarify yourlosses by selling when its value inevitably declines. This is the same for allinvestment.


What you need to consider beforeinvesting in Bitcoin

Like any investment, cryptocurrencies alsohave risks and potential returns. Compared with traditional types ofinvestment, cryptocurrencies are particularly risky.

Here are some things you need to considerbefore investing:

1. We absolutely don't recommend investingyour life savings in the cryptocurrency market

2. It is best to see it a bit like agambling, so only invest in a small part of your disposable income, and you areready to lose a lot

3. Never invest more than the loss you canbear

4. If you dont have much money left at the end of each month, it is best to avoidcryptocurrencies and focus on saving money.

5. Like traditional assets, it is best totreat cryptocurrencies as a long -term investment rather than short -term investmentto give you the best opportunity to make money

6. Cryptocurrencies are easily fluctuated,and they are easily affected by the crash of bull markets and market collapse


How to invest in Bitcoin

Buying coins (or coins) on cryptocurrencyexchanges is the most common way to invest in Bitcoin, and it is to obtainBitcoin through Bitcoin mining.

But there are other options:

1. Buy stocks of Bitcoin -related companies

You can invest in cryptocurrency exchanges,and even buy stocks of companies receiving Bitcoin payments.

2. Bitcoin ETF

You can invest in the Bitcoin ExchangeTrading Fund ETF. This copy the price of cryptocurrencies, allowing you to buyfunds without actual transactions Bitcoin itself.

3. Investment blockchain technology company

You can invest in the blockchain network(system for recording encrypted information). For example, technology platformSolana claims to be the fastest blockchain in the world.

4. Bitcoin Fund

Several investment companies are launchingBitcoin funds.

It still fluctuates, but it may be easierto sell your investment and recover your funds compared to direct investment.

There are also some funds that have acertain opening on traditional assets such as Bitcoin and stocks and bonds.

5. Bitcoin options

These are a form of financial derivativesthat give you the right to purchase or sell Bitcoin at a set price (calledexecution price) before an expiration date.

Unlike buying bitcoin cryptocurrenciesdirectly, Bitcoin option enables you to take speculative positions (up or down)the future direction of market prices.

If you think the market price will rise,you will buy the options:

If your prediction is correct and themarket price rises to the execution price higher than Bitcoin options, you willbe able to purchase Bitcoin at a pre -specified price. The increase in theprice of Bitcoin exceeding the exercise price determines how much profits youwill get.

If your prediction is wrong and the priceof Bitcoin falls, you can make the off -date contract expire, and it will onlylose the premium you paid for the opening of the position.



What is Bitcoin?

Founded in 2008, Bitcoin is the mostpopular cryptocurrency and the largest cryptocurrency.

The original intention of the blockchainwas to subvert the traditional global payment network by enabling the point -to-point digital payment that does not require credible third parties (such asfinancial institutions).


Is Bitcoin a long -term good investment?

With the existence of Bitcoin, we have seenit exponentially growing. If history repeats (we have seen many times now),Bitcoin often reaches a record high every 3-4 years.


Why does Bitcoin rise?

Although the driving force behind Bitcoin'srecent price rise is not completely clear, the media will be attributed to thefollowing points:

The market is seeking Bitcoin as aninflation hedge tool. Unlike many major global currencies (including the USdollar), the fixed supply of Bitcoin is 21 million units.

Large -scale digital payment companies suchas PayPal, Venmo and Square now accept Bitcoin as a form of Pay or exchange onits platform.

Several companies, including Tesla and dataanalysis company Micro Strategy, have announced a large purchase of Bitcoin.They also announced that they would begin to accept Bitcoin payment.


Is Bitcoin a safe investment?

The value of Bitcoin or any givencryptocurrency is still highly uncertain, and they all show significant pricefluctuations.

Cryptocurrencies are not ordinary shares ofthe company and are not traded on the stock exchange. Different from investingin stocks or common funds, there is no basic fundamental (cash flow, profit,tangible assets, etc.) to support their valuation. This caused uncertaintyleads to extreme fluctuations in cryptocurrencies such as Bitcoin, Ethereum andLitecoin. Other risks include the price manipulation of unknown marketparticipants, the possibility of government intervention, and competition fromother cryptocurrencies. The US Securities and Exchange Commission and otherfinancial regulators have recently issued letters to warn investors' risks.


How do you buy Bitcoin?

Bitcoin cannot be traded directly unlessyou buy cryptocurrencies from the owner directly. They are usually purchased onthe exchange, such as Coinbase, and users can exchange Bitcoin with currency orother cryptocurrencies on the exchange. Buy the fragmentation of Bitcoin.


The above is about whether Bitcoin is agood investment, and how we should invest in Bitcoin to make money. Thestrongest indicator of Bitcoin value is the absolute scale of its market value-more than $ 600 billion. If we point out from the perspective of the Standards500 Index, it will make Bitcoin the top 10 companies in the world, from zero tohalf trillion in just 12 years. Only a few companies, such as Facebook andTesla, have grown so fast. Bitcoin is unique in assets. It is the first valuestorage method in the world that is not affected by demand to increase.