Over 1 billion people around the world use cryptocurrencies. If you’re among those in this figure and want to contribute to the 250,000 confirmed Bitcoin transactions daily, it’s important that you learn how to invest in digital currencies the right way.
Googling “how much should I invest in Bitcoin” is a great place to start, but you’re going to need a post that compiles all relevant information about Bitcoin trading and purchase. This is that post.
Read on to learn all about Bitcoin, its benefits, how much to invest, and how to get started.
The Basics of Bitcoin
If you’re new to the concept of cryptocurrency, it’s essentially a digital asset that you can exchange for goods and services.
There are many types of cryptocurrency including Ethereum and Litecoin. Bitcoin is the most popular form of digital currency in the world. It’s the one that people are most likely to buy and trade in.
The history of Bitcoin began in August 2008, when an online entity named Satoshi Nakamoto published a paper on his invented asset type. It was titled Bitcoin: A Peer-to-Peer Electronic Cash System. In January 2009, Nakamoto implemented the first Bitcoin software as open-source code and released it to the public.
Bitcoin basically matched Nakamoto’s vision of a decentralized currency. It doesn’t go through a bank and isn’t regulated by a federal entity. Instead, it’s peer-to-peer, meaning that people can independently buy, sell, and trade in Bitcoin.
Bitcoin is part of the blockchain, a decentralized ledger that records all online Bitcoin transactions. Because this is where it’s stored, transactions are made and recorded on an unregulated network. Every time someone makes a Bitcoin purchase, it is recorded on the ledger and sealed off to prevent fraud.
Thus, this digital technology is untraceable and secure. It’s made by people, for people. You can trade in Bitcoin online, buy it, sell it, and earn it by taking surveys and playing games.
The Benefits of Buying Bitcoin
One benefit of buying Bitcoin is that it’s easy to spend. There are no physical Bitcoins. All of them only exist digitally on the blockchain.
However, you can easily spend them both online and in stores. All you need to do is install a Bitcoin eWallet onto your smartphone.
You can then scan the QR code at many different venues including some retail stores. Online shopping is also easy because you can link websites directly to your Bitcoin wallet.
Additionally, many major credit card companies are coming out with Bitcoin debit cards. Some examples include Visa and Mastercard.
You use these credit cards at any retail venue, even those that don’t directly accept Bitcoin. The store is paid in fiat currency while the corresponding amount of Bitcoin comes out of your eWallet. This keeps both you and the vendor secure.
In addition to being easy to use, Bitcoin is also fast. When you make a purchase, funds will be immediately removed from your eWallet. This is because your provider doesn’t need to communicate with a bank or other centralized facility.
Bitcoin also is 100% permissionless. Fiat currency doesn’t just require bank processing but also necessitates bank permission. They need to approve transactions and have the power to reject them.
This is not an issue with Bitcoin. There are no third-party limits. If you have the funds, you can use them.
Bitcoin is also something that you own. It’s an asset, not something housed in a third-party location. You are your own bank when you use Bitcoin, which means that it’s immune to confiscation by financial institutions.
Once you hand cash over to a vendor, you can’t get it back unless they actively give it to you. Bitcoin transactions are similar to cash in this way.
Because there’s no centralized bank, there is also no risk that the bank will give you chargebacks. You don’t need to worry about fees and fines.
Bitcoin and Security
Despite these many benefits, however, security is the #1 reason that people invest in Bitcoin.
Bitcoin’s decentralized nature means that it isn’t traceable. People can’t look back at previous transactions and follow a route to your identity. This means that malicious users won’t be able to trace transactions back to you and steal your personal information.
Bitcoin also isn’t linked to a bank account, so your financial information remains safe. If someone were to breach your eWallet, they couldn’t do anything beyond stealing the Bitcoin there.
The wallet wouldn’t be tied to your identity or financial information, so it wouldn’t be stolen. This is unlike when someone breaches a card that’s attached to your bank account, which would give them access to your personal and financial data.
But how likely is another user to breach your eWallet? As it turns out, there is an extremely low chance.
The blockchain is protected by the 256-bit SHA hash functions. This is different from standard encryption because SHA hash functions provide individual fingerprints for transactions. They can’t be reconstructed or reused.
These hash functions are what banks and the military use to encrypt their systems. An investment in Bitcoin is an investment in your security.
Answering, “How Much Should I Invest in Bitcoin?”
As of 2022, the Bitcoin market is worth $17.05 billion globally. This figure is expected to rise steadily between now and 2030 at a rate of 26.2%. When you invest in Bitcoin, you’re putting money into a growing market so that you can accumulate more wealth.
The value of Bitcoin is also consistently increasing. Its 200% CAGR is unheard of. It means that you’ll be getting a high ROI.
If you invest $100 in Bitcoin today and its value increases by 200% annually, you’ll have $300 after just one year. This will add up a lot over time. Eventually, some experts project that Bitcoin will completely overtake fiat currency, so you’re investing in the future.
By the end of 2025, Bitcoin could reach a peak value of $100,000. By the end of 2030, it could be worth $150,000.
Many successful people invest in Bitcoin. The average investor will purchase anywhere between 5% and 30% of their investment capital on Bitcoin. 15% is a pretty safe bet, but beginners may prefer to make smaller investments to find their footing in the market.
Remember that you can always adjust and adapt to the changing cryptocurrency market. This means selling Bitcoin when the market is at its peak, scaling investments up or down based on current trends, and holding onto investments until the market is projected to increase again.
Deciding How Much to Invest
While these tips hold up across the board, individual investors still have unique needs. While 83% of millionaire millennials now own a lot of crypto, their investment strategies won’t reflect those of an average person.
If you make $45,000 to $50,000 per year, the first thing to do is set up a comprehensive budget. Pay yourself first to ensure that you have enough money for food, housing, and other necessities. Then put the rest toward high-value investments like real estate, stocks, and, yes, Bitcoin.
Start by investing $10 and see what it’s like to be a cryptocurrency investor. Once you decide that it is for you, you can begin growing your portfolio.
If you make $45,000 per year, you may consider saving 10% of your annual salary in the beginning. This amounts to $4500. You will need to divide this figure between traditional assets and Bitcoin.
If you follow expert advice and invest 15% in Bitcoin, you’ll be making a $675 investment.
Take this overall budget and invest it over the course of time. Divide it up into 3-month to 6-month intervals and diversify your portfolio over time.
This will amount to a $169 investment quarterly or a $338 investment semi-annually. Note that you also can simply invest the $675 in one lump sum as well. This is a good choice because it means you don’t need to worry later on, but it also can backfire since you’ll take a big financial hit at the beginning of the year.
One of the main reasons that Bitcoin investments are worthwhile is that they help to diversify your portfolio. The stock market is constantly fluctuating and dipping. Military conflict elsewhere in the world is causing inflation of traditional assets, which can lose you money.
It’s important to invest in many different things, and Bitcoin provides a deviation from the norm.
When you allocate 5%-50% of your investment portfolio to cryptocurrency, you diversify your portfolio and protect against changing market trends for traditional assets.
Additionally, it’s important to note that Bitcoin increases in value over time pretty steadily. The market is really volatile in the short-term, and the price of Bitcoin can greatly decrease if you look at 1-2 month trends. However, over the course of several years, you are likely to turn a steady profit.
Remember that you can change your investment strategy at any time. Add more funds to your Bitcoin investment pool when necessary. Cash your crypto out when the market is peaking to turn out a higher ROI.
How to Invest in Cryptocurrency Properly
Investing in cryptocurrency is more accessible than ever before. Online exchanges are booming, and they’re a classic way to trade in Bitcoin.
An online exchange automatically pairs a Bitcoin buyer with someone selling crypto. You as a buyer will enter your desired purchase amount. It will then partner you with someone selling that amount of money in Bitcoin.
The exchange will take place completely anonymously and automatically. While you won’t know who you exchanged cash for crypto with, it won’t matter. The exchange regulates trading and your crypto should appear in your eWallet within a week.
When you decide to cash out on your investment, you can go back to these exchanges as a seller. You’ll be paired with a buyer and experience the flip side of your past transaction.
You also can use online exchanges to complete a direct exchange. These are ideal for those who dislike not knowing who they’re trading with. You can find a seller manually and talk with them prior to the transaction.
This usually takes somewhat longer than an automated trade. However, some people find the greater control worth the commitment.
As Bitcoin becomes more accessible, more ways to access it emerge. Bitcoin ATMs are kiosks that exist in grocery stores, gas stations, and banks. You put in cash and the corresponding amount of money appears in the eWallet that you connect to the transaction.
This process takes minutes, and you can find a machine in pretty much any area. Google “Bitcoin machines near me” to find one close to you.
Earning Your Investment
Don’t want to spend real money on Bitcoin? That’s okay. There are awesome options available to those looking to earn Bitcoin as a reward for online activities.
Cointiply is a great site for this. You can play online games just as you would play to pass your time on your smartphone. You’ll earn real crypto as a reward for clearing stages and finishing tasks within the game.
In addition, you’ll earn loyalty points for boosting your level. You can then multiply coins in a unique sci-fi-themed multiplier game to get even more money. Plus, you get 5% interest on your balance once you have 35,000 coins in your Cointiply wallet.
This isn’t a substitute for trading in Bitcoin for new investors. However, it’s a great way to get the most out of your investment and get the highest possible ROI.
Get Started With Cointiply
If you’ve been Googling “how much should I invest in Bitcoin,” you likely are ready to buy digital assets ASAP. While this is a good idea, you can also earn real Bitcoin by completing online tasks and playing fun games.
Cointiply is committed to helping you earn crypto without lifting a finger. We offer fun games to pass the time that you can also earn Bitcoins from. It’s a win-win!
Sign up for Cointiply to begin earning real money from home.
Comments by Cointiply Team