In 2009, an anonymous group or person “Satoshi Nakamoto” invented a new type of currency that does not physically exist and can only be used online – Bitcoin. This new technology was the first of many, which pathed the way for what are now more commonly referred to as “cryptocurrencies”. These have now become extremely valuable and sought after by investors far and wide.
Why Invest In Bitcoin?
There are many reasons to ask this question, especially since this is a new type of investment and it’s normal to have questions and doubts. Bitcoin was created as an answer to safer payment options for users. The reason for this is that the technology used allows for the cryptocurrency to be tracked and authenticated by the systems in place. This is very important in helping prevent any counterfeit currency or potential online scamming or malicious threats. The blockchain technology it uses also provides a safe, almost impossible-to-break encryption so no-one with the current computing power can succeed.
The fail safe rule in place allows for any transactions to be authenticated by the system. To motivate users to continuously carry on authenticating the system rewards the community by giving them Satoshi (smallest denomination in Bitcoin) so they can accumulate enough to have a whole Bitcoin.
How Is Bitcoin So Expensive?
Bitcoin has continued to increase in value as the demand for the cryptocurrency has increased in the last few years. The reason for this is because Bitcoin, unlike traditional currencies, is not valued by a country’s economy or policies but by the amount the market is willing to pay for it. To put this into context for you, the same thing happens with gold and platinum which are both minerals and are valued based on demand.
Another reason that Bitcoin has maintained its value is because there are now more companies out there that are accepting Bitcoin, such as Tesla who have been very open about this. Some early adopters have now made huge fortunes such as the rapper 50 Cent who had 7000 coins from albums he sold to customers paying in Bitcoin and is now reported to be a Bitcoin millionaire.
Who Invests In Bitcoin?
With time the popularity of Bitcoin has shot up, now we have financial institutions that have started to invest in cryptocurrencies to diversify their portfolio. Mutual and pension funds have started to come out and be more open about their investments in Bitcoin and other cryptocurrencies but they do so with a condition. They only buy Bitcoin that has been mined in countries that comply with their ethical and sustainability standards which has made this type of Bitcoin very sought after and has a higher premium then the ones mined in China.
Greyscale cryptocurrency fund is one of the largest funds in the world which is specifically designed to invest in cryptocurrencies. The fund has over $3 billion worth of cryptocurrency under management with other fund managers coming out and doing the same. This has indicated that these investments are for the long run and it’s something they will be doing in the future. Other famous investors include the Rothschild Investment Fund, Mark Cuban and of course Tesla. All these funds have decided to diversify their portfolio with cryptocurrency showing how important this investment option is to their overall performance.
Can We Trade Bitcoin?
There are now many platforms where we can buy and sell cryptocurrencies so everyone has a chance to get involved. The large sites that you might be familiar with include eToro, Kraken and Coinbase. The latter also went public in 2021 and was valued at more than $47 billion in the New York stock exchange NASDAQ which was a massive boost for the cryptocurrency community. Governments around the world including the US and Canada have given licenses to cryptocurrency exchange platforms to conduct business. This is great news as it means everyone can get involved and not just a few professional investors. Anyone can participate in trading and it is not necessary for the individual to be well-versed in trading strategies. With the emergence of automated trading software around the world, this is now achievable. Trading robots like Bitcoin Gemini have a 99 percent success rate in generating large returns. Before beginning your trading journey, you can refer this website https://kryptoszene.de/bitcoin-robot/bitcoin-gemini/ to run a test trade with the robot. You may simply register an account with a small deposit and begin trading to see the outcomes for yourself. The volume of money invested in Cryptocurrencies has now surpassed hundreds of billions of dollars and this is all thanks to the huge publicity it is getting in the press around the world.
Should I Invest In Bitcoin?
As you are aware, it is smart to diversify your investments so you are not reliant on a specific company or sector to bring you profits. Most investors use Bitcoin as part of their portfolio diversification and this helps them leverage other investments against Bitcoin and other cryptocurrencies. If you are a beginner, it’s worth remembering this point as it’s easy when you start to get caught up in placing all your investments in one company or sector. Make sure you research the industry and the companies you invest in so you are aware of what the potential outcome will be.
As mentioned, cryptocurrencies like Bitcoin provide another option for you as they are not tied to any countries’ economy or industry; they will not fluctuate as much when news about GDP or currency value changes so they’re definitely worth having as an option for diversification.
What we can say about Bitcoin and other cryptocurrencies is that they offer an alternative to investors. This option allows them to make better decisions in their investment strategy and portfolio and ultimately, make money at a lower risk. With the current trend, this will carry on and Bitcoin and Etherium will most probably continue their climb in value and will still be more valuable than gold and other precious metals which surpasses everyone’s initial expectations.