2017 was a wonderful year for Bitcoin but 2018 did not yet live up to initially set expectations. Basically, people that are specialized in Bitcoin and crytpocurrency investments are now divided. Investing in Bitcoin is something so many are interested in but before you do this, there are some things that you absolutely have to know.

Bitcoin Is Volatile

The most important thing to remember about Bitcoin is that it is not a stock or a company. It is practically a currency. Bitcoin investments are more similar to Forex investments than stock investments. You need to fully understand what you invest in and most people simply do not. You have to buy Bitcoin in order to make any investment.

There are different ways in which you can invest in Bitcoin. Every single option needs to be considered. The common things to take into account, especially when knowledge is not really high, are the following.

Holding Bitcoin

This is the most common way to invest in Bitcoin. You practically buy the currency and hold it until it increases in value. Then you sell it. The problem here is volatility. According to Cryptoext, some specialists think Bitcoin is going to reach $60,000 this year, which means a 10 times increase in value. Others say that Bitcoin is not going to climb and that it is better not to hold the cryptocurrency. Various Bitcoin predictions are laid out at the moment.

All this practically means that you have to be ready for huge price variations. The volatility here is much higher than with other investment options available. You need to be prepared to deal with this and weather the storm if prices go down.

Bitcoin Trading

This is different than holding since you want to actively trade the cryptocurrency as you buy at lower prices than what you sell at, all done in short time intervals. Successful trading in this case requires a lot of practice and knowledge. Every single piece of news that appears about the crytpocurreny needs to be taken into account. We are now looking at a market that is filled with large players. They take advantage of traders that do not have knowledge and trade without an aim.

If you are interested in Bitcoin trading, you need to start small and practice. A failure to do this can lead to huge losses.

Investing In Mining

This is a pretty unique way to invest in cryptocurrencies. Instead of buying Bitcoin, you buy the equipment you need to buy Bitcoin. Mining equipment is quite expensive though so you will need a larger initial budget. Also, if you do not live in an area where electricity is cheap, running costs for Bitcoin mining can be very high. The truth is that for most people out there it makes much more sense to buy Bitcoin instead of investing in mining equipment.

It has to be added that there are sites that allow you to mine through them. In this case we refer to cloud mining. The sites that offer such services fall into one of 2 categories:

Complete scams that will never give you Bitcoin.
Not scams but very bad investments on the long run. You would basically get more Bitcoin if you were to straight up buy with the money available.

By Boris Dzhingarov

© 2018 Copyright Boris Dzhingarov - All Rights Reserved
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