Bitcoin Basics: Why And How Should You Invest In Crypto?

Invest In Crypto

As of February 2022, Tesla, owned by the world’s richest man today, Elon Musk, holds $2 billion of assets in cryptocurrency. A year ago, Tesla invested in Bitcoin–the first established cryptocurrency. Invest In Crypto-

CNN Business quoted Tesla in an SEC filing saying, they ‘believe in the long-term potential of digital assets both as an investment and as a liquid alternative to cash.’ However, as cryptocurrencies can be volatile and a risky investment, Tesla further announced that they would continue to gauge environmental conditions and ‘increase or decrease holdings of digital assets’ as seen fit. 

Why Invest In Crypto?

So, why are people and businesses investing in cryptocurrencies? Let’s dig into a few reasons:

  1. Buying Bitcoin Is Made Easier

When cryptocurrencies first launched, there was a steep learning curve. Investors needed technological literacy to buy digital coins. There are more options to invest in Bitcoin at various risk levels. 

While learning the ropes, a good rule of thumb is to invest only a small portfolio in Bitcoin trading. With a crypto trading platform like Netcoins, you can start trading with USD$10 and with no fees when funding your account. 

  1. Diversification Of Investment Portfolio

Cryptocurrencies exist entirely online. You invest in a wholly different sphere of the financial market. Crypto has the potential of creating a balance against the impact on the traditional market, including inflationary trends and stock market downturn. The decentralized crypto relies on the global, direct peer-to-peer interchange. In this way, crypto has the potential of insulating itself from the centralized financial market.

  1. Expedite Local And Overseas Transactions
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Without an intermediary, digital investments pave the way for faster transactions, even those from overseas. Moreover, there is a potential for cost reduction by removing taxes and maintenance charges made through banks and the central government. You only need to pay a single transaction fee. The payment can be zero, low, or high and based only on the amount you need to transfer. 

  1. Potential High Return On Investment

Several crypto investors and analysts further announced predictions of Bitcoin prices rising to over USD$100,000 in the next five years. Leading Bitcoin investors like Microstrategy CEO Michael Saylor expressed how ‘cryptocurrency is the next biggest investment.’ Since its inception in 2009, Bitcoin has grown to be the most prominent blockchain-based digital asset.

  1. Transparency That Protects All Parties In A Transaction- Invest In Crypto

Cryptocurrency payments are encrypted, recorded, verified, and monitored in a highly transparent and unchangeable way in a public ledger. It has the potential to minimize discrepancies from incorrect valuations and internal falsifications. Such a level of transparency also offers protection for all parties in every crypto transaction.

  1. The Future Currency To Behold- Invest In Crypto

During its inception, skeptics found it hard to believe an invisible form of currency would hold value in the real world. Today, many establishments and online sellers accept Bitcoin as payment. Consumers started using digital tokens to purchase actual goods. Today, Bitcoin and other prominent digital coins have real-world value.

How To Invest In Crypto or Bitcoin?

how to use bitcoin

There are different ways to buy, sell, and invest in Bitcoin and other cryptocurrencies. Here are some:

  • Cryptocurrency exchanges. Different platforms may offer only Bitcoin, while others have dozens of alternative digital tokens you can buy. Be wary that some venues may charge different fees. Meanwhile, some platforms do not charge any fee when funding your account. 
  • Stockbrokers. Some stock-trading platforms may offer to buy and sell Bitcoin with no fees. 
  • Bitcoin owners. You can buy directly from Bitcoin owners, but be cautious of Bitcoin scammers. First-timers are forewarned against peer-to-peer Bitcoin buying as scammers may get access to your private key. It is best to brush up on the different ways hackers attack cryptocurrencies to avoid this.
  • Bitcoin ATMs. You can buy and sell cryptocurrencies from Bitcoin ATMs that use QR codes to send cryptos to your digital wallet. Remember, though, that while these blockchain-based transactions are safe, they have high transaction fees ranging from 10% to 25%.
  • Invest in Bitcoin, ETFs, or Blockchain Tech Companies. There are several options for those who don’t want to trade bitcoin itself. You may choose to buy shares in companies that accept Bitcoin payments. You may also invest in Bitcoin ETFs (exchange-traded funds). Otherwise, you may opt to diversify your portfolio by investing in blockchain networks—the system that records crypto information. 
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Before You Buy Bitcoin

Know that you may need to provide some personal information when setting up your cryptocurrency account. You may need your Social Security number and picture ID. To start funding your account, you may also need to provide the number to your debit card or bank account. 

However, it is not advisable to use a credit card to purchase Bitcoin. Credit cards are a high-interest product. Thus, avoid borrowing money to put into a risky investment like Bitcoin using a credit card. It is best not to invest money you need or can’t afford to lose. 

Furthermore, to ensure utmost security while buying Bitcoin, steer clear of public internet connections. A secure, private internet connection is a must when making online financial transactions. 

Finally, the decentralized nature of crypto trading means a lack of investor protections. There is no protection for crypto investment theft and failures. There is also virtually no protection at this time against individual breaches to your crypto account. Therefore, be vigilant at all times.

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