Many people these days ask a frequent question. Is it worth investing in Cryptocurrency and Bitcoin? Due to falling interest rates and weak stocks, alternatives are being sought. Investing in Cryptocurrency or buying Bitcoin can be worthwhile, as the overview with pros and cons shows.
Against the background of the headlines from the past few weeks, some investment-joyful investors will be concerned with the question asked at the beginning of this article. – Whether it is worthwhile investing in cryptocurrencies such as Bitcoin (BTC) or Altcoins from Ethereum (ETH) to IOTA (MIOTA). There were indeed some corrections. But these can be seen as both a risk and an opportunity. Whether you should invest in a crypto-currency is of course decided by your idea of possible returns, holding periods and your own risk tolerance. In addition, there is now not only the way via direct purchase to profit from the growing crypto market. How you answer the question “Investing in cryptocurrency and Bitcoin – Is it worth it for me?
Every market is characterised by opportunities and risks
You should know that after a decline, better times always follow. The high volatility of the crypto market in particular is a major attraction for many investors. It is obvious that forecasts by self-proclaimed experts on medium-term price increases into six-digit ranges for Bitcoin should be treated with caution. However, there is also a reason why, according to surveys, Bitcoin has good prospects for further significant gains.It system-related limited availability for example, making it worthwhile investing in Bitcoin.
Investors and industry experts have been discussing the pros and cons of investing in cryptocurrencies since the introduction of Bitcoin. Again and again, the central question is about the risks mentioned on the one hand and the possible returns on the other. In any case, the past decade since the advent of digital currencies has gradually led to a different assessment. Crypto-currencies have left their niche existence.
In short: Coins are increasingly on their way into the so-called mainstream
In the recent past, Bitcoin has recorded immense increases in value, but has suffered almost as great losses in value. The question therefore arises whether Bitcoin and Co. have the potential to secure a reliable place in the financial market. Thus also offer an investment alternative for newcomers and smaller investors. In view of the now clearly four-digit number of digital currencies that have emerged since the introduction of Bitcoin, there is, at least theoretically, a suitable offer for every type of investor. Not to mention the financial derivatives that are gradually emerging.
At the beginning of March 2020, the coinmarketcap portal estimated the market capitalization of the leading five currencies Bitcoin, Ethereum, Ripples XRP, Bitcoin Cash and the Stablecoin Tether alone at well over 180 billion US dollars.
Cryptomarket steadily growing for more than a decade
As clearly as the prices on the crypto market fluctuate, such payments are a pointer to the fact that investing in cryptocurrencies is gaining in importance for good reason. The increasing acceptance of the leading currencies also shows that, after about a decade, this is no longer a temporary investment and speculation phenomenon. The fact that the BTC price, in particular, showed enormous gains at times and experienced massive corrections only a short time later should not obscure this fact: The market offers a wide range of opportunities that also characterise established asset classes.
Anyone who is not afraid of risk can make ample profit, especially from the sometimes significant fluctuations in crypto prices. As much as many a more classically oriented investor shuns the susceptibility of crypto currencies to fluctuations. These sometimes serious fluctuations can be an incentive. Invest in cryptocurrencies and Bitcoin: is cryptocurrency worth investing in? It is precisely here that the willingness to take risks plays a central role.
An understanding of the technical and monetary aspects is essential
Understanding how cryptocurrencies work is an elementary aspect to be able to decide about sense and nonsense of an investment. At least you should know what is behind the term block chain and how the different systems work. A clear advantage is the security against manipulation, the traceability of transactions and the more or less guaranteed anonymity of the various formats on the market. The fact that more and more merchants (both in online trading and in the “real” world) are accepting the first tier of coins as a means of payment after all, suggests that investing in a crypto currency can be worthwhile.
How can I actually invest in a cryptocurrency and Bitcoin?
Particular attention should be paid to the consideration formulated in the headline, how you can invest in a crypto currency. There are several possibilities. Depending on the goal you are pursuing for yourself. This does not only refer to Bitcoin as a kind of leading currency in the industry.
The most common ways to invest are
- Currency trading against other crypto currencies or fiat money
- Trading via accounts on crypto exchanges
- Automated AI supported bot trading
The current concerns about the corona virus are even more likely to lead to investor questions as to whether investing in cryptocurrencies can be worthwhile in your own case. The reason for concerns is of course the development on the crypto market worldwide.
And this is exactly where the situation can offer opportunities. At least if you follow the unwritten rule that better times follow at the end of every crisis. In the meantime, you could buy coins as cheaply as you have not been able to for a long time. So you reduce losses as a result of early purchases at higher prices.b
Currency trading involving cryptocurrencies
Increasingly, currencies can also be worth trading against each other – similar to the classic currency market. As a result of the crisis, the prices of many prison assets such as the euro, the franc or the pound sterling have also come under pressure. As a result of this development, an investment in Bitcoin and crypto currencies can prove to be a profitable approach. Again, of course, the key is to find the right provider and select the right currency pairs for trading.
CFDs and Co - betting on price fluctuations as an investment
In addition to the direct investment in Bitcoin in the form of a “physical” purchase, there are brokers and exchanges on the market with increasing selection, which allow you to speculate indirectly on the crypto prices. Many products have evolved over time, allowing you to bet on price movements, so to speak. Contracts for Difference (CFDs). One model, which allow you to speculate on a selection of the leading crypto currencies. In many cases you can bet not only on rising but also on falling prices of crypto currencies.
However, higher profits are tempting if you are prepared to take sufficient risk. Not to forget. If you own currencies of the digital world and prices fall, you can also hedge your wallet portfolio by speculating on falling prices and ideally turn losses into profits. But this is of course a greater risk and need for prior knowledge.
Investing in cryptocurrency and Bitcoin - our conclusion: For many it can be worthwhile
With all the above-mentioned incentives for investing in cryptocurrency a worthwhile decision, you should always keep in mind the legal framework at your place of residence. Not all countries allow trading, in other cases there are clear guidelines for permitted trading. Of particular importance is always the question of how your crypto capital is taxed. There are sometimes serious differences between different countries. Be sure to find out whether and how income is taxed and whether losses can be claimed in your tax return. More and more countries are introducing rules because they have recognised crypto-earnings as an interesting source of income. Overall, crypto investments are suitable for anyone who can cope with a high degree of fluctuation and is sufficiently resilient.
But above that, the risk has always been matched by enormous profit opportunities if the market were to break out again in a significant upward direction. You can get to know trading with many providers with a demo account, so that you can test the strategically sensible procedure without risk and get to know the market.
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