Investing in cryptocurrencies is considered a very profitable business today. But certain risks are associated with it – it is difficult to predict whether the rate of the selected electronic money will rise or fall. Therefore, many investors prefer not to get involved with new altcoins, but to invest in bitcoin, whose reliability has already passed the test of time.
All about investing in bitcoin
There are three main ways to invest in bitcoin.
- The first way is to mine bitcoins using your own equipment or cloud resources.
- And the second way worth describing is long-term investments. This is a buy and forget investment. In the case described, bitcoins are held for at least one year. With long-term investments, cryptocurrencies are usually bought in large quantities and for large amounts in order to increase the likely profit.
- The third way is medium and short term investments. Medium-term investments – buying an asset to sell it within a month. Short-term investments are trading. Traders play on constant fluctuations in bitcoin rates. Principle – as with medium-term investments, only traders wait not for a month, but for a day, an hour or a minute.
How to invest in bitcoin: instructions
The first step when investing in bitcoin is creating a wallet to store the cryptocurrency used. And here you should carefully choose a wallet suitable for use. There are six types of vaults for cryptocurrency holders. It is worth listing them, discussing the main advantages and disadvantages of certain types. And it is necessary to consider – wallets differ in the principle of use and operation. Although in certain cases it makes sense to create more than one store, for different purposes.
The question remains, what type of wallet is recommended for investing? Exchange traders prefer to use the online wallets provided by the service. They should not be used to store large amounts of bitcoin, but they are ideal for trading. It is preferable to choose a “thin” or “thick” wallet as the main storage (candidates – BitcoinCore or Electrum). We also shouldn’t forget about mobile bitcoin storage. And as a reserve, a paper wallet is useful. Hardware storage has certain advantages, but it is preferred by experienced traders and investors.
After choosing a wallet, you need to choose a suitable exchange or exchanger for purchasing bitcoins, where you can convert btc to etn or any other currency. It is worth considering – a number of exchanges offer their own wallets, and here one should take into account user reviews about the site regarding the reliability of electronic storages. It is necessary to remember here – in order to make such transactions, it is recommended to familiarize yourself with the features of exchangers and obtain information about their reliability.
Where to invest in bitcoin?
The main question for beginners is where to invest in bitcoin? When choosing a place for investment, there are two options – exchanges and exchangers. Exchangers charge high fees but are more accessible. The situation with exchanges is not the following: new cryptocurrency exchanges are not reliable, there is a high probability of losing the money invested. And old, reliable sites are closed for registration and do not accept new users.
But there are a number of exceptions. The investment mechanism is simple – a suitable exchange is selected, registration is completed and bitcoin trading begins. It is strongly recommended that you carefully read the terms and conditions of each transaction before concluding. The market situation changes daily and should be monitored constantly.