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There is no way to invest in Bitcoin in the way you would invest in a company's stock. But depending on the long-term plan for your new cryptocurrency, buying Bitcoin and monitoring its value can technically make you an investor of sorts. If you are looking to buy bitcoins at the lowest price and sell at a higher rate, you could make money from your purchase as an investment.
Despite being a cryptcurrency, most people are not actually buying bitcoins to spend them on assets. No, many bitcoin owners seem happy to buy and hold them. Bitcoin does not speak of a new form of currency that could one day take over the dollar; it's an investment, and they hope it repays.
Bitcoin has established itself as an investment; the high volatility that its value crosses on a daily and even hourly basis makes it much more difficult to use it as a currency. When a bitcoin transaction is complete, it could be worth less than it was when you tried to use it for the first time. This has made it more profitable as an investment than a currency for many, but investment analysts still remain wary of bitcoins.
Volatility allows Bitcoin to reach a value of almost $ 20,000, as it did at the end of 2017; it is also what causes the tremendous collapse of the price that has been spent throughout 2018.
If you are looking for the perfect time to invest in bitcoins, you will not find it. There are professional analysts who have not been able to determine where the bitcoin will go. That unpredictability can certainly make it tempting, however. Mark Cuban's thoughts on bitcoins have gone back and forth, but his approach to investing in it is solid: only if you can save some money and not overdo it. The bitcoin market is the maximum in terms of high risk and high remuneration.
If you are looking to "invest" in bitcoins, however, you will also need to know what it means.
None of the examples mentioned below are investment recommendations, just examples of bitcoin-related investments. Each of these comes with a series of unique risks and must be considered a risk; make sure you do your due diligence with research before making a risky investment.
Is there a thing like a Bitcoin stock?
In case you forgot what Bitcoin is, it is not a physical form of currency, nor is it a company or society that can become public. So there is not exactly a title for this, by itself. However, you can treat the bitcoins you have as a resource that can be bought and sold, and its value as the price of the bitcoin shares. The price fluctuation can be monitored in the same way that you can monitor any other action in your portfolio.
There are other ways to incorporate "bitcoin actions" into your portfolio. The Bitcoin Investment Trust (GBTC) is a notable option that operates similar to a fund traded on a stock exchange. It is a trust that owns bitcoin that holds and, by buying the shares, you can essentially bet on the value of bitcoins without owning one (their bitcoins are protected using Xapo, Inc. as storage).
This can be an interesting way to evaluate the bitcoin market without all the work of getting bitcoins, but it comes at a price. Literally, you will pay very high prizes. The title has recently split to make things more accessible, but the prize remains high. At the time of writing this document, a portion from GBTC is equal to 0.00100396 BTC or $ 6.77. Yet the shares are going for $ 10.70. You will also need to take into account the management fees. As a result, some think it is worthwhile to own bitcoins on their own.
Another possible attempt to invest in the value of Bitcoin without buying bitcoins is with bitcoin futures. Bitcoin futures allow betting primarily on the value of cryptocurrency in the future; if you think the price of bitcoins will rise in the future, you could buy a futures contract. If your instincts are right, and the price goes up when the contract expires, you owe a sum equal to the gains. The major positions that offer bitcoin futures are the Chicago Board Options Exchange, or CBOE, and the CME Group financial market.
Bitcoin futures have pros and cons quite extreme. The contracts are exploited as you are paying a fraction of the actual price of the bitcoin when you buy futures, giving you the opportunity to profit from it. However, the contract has an expiration date in the near future. If the price expires when it expires, you can not just wait and wait to see if it rebounds; you just lost.
Which industries are affected by the cryptocurrency market?
There are other, somewhat more tangential, ways of dealing with bitcoin investments. Look at the industries affected by bitcoin, how the industry works and how bitcoins are discovered. Adding stocks from relevant companies is a possible way to invest in the future of bitcoin, from a distance.
Invest in Blockchain
Since there is a prevailing thought that the most valuable aspect of bitcoin is the blockchain technology behind it, investing in blockchain is another way of tangentially investing in bitcoins without the worrying volatility. There are many large companies that are developing their own blockchain networks for a variety of purposes that may be worth examining.
This does not mean that it is risk free, though. Blockchain technology is an intriguing development that could upset a number of huge industries, but at the moment it is also a trendy word to throw away. Long Island Iced Tea, a beverage company, renamed Long Blockchain at the end of 2017, apparently knowing that the word itself could cause a jump in stock. And for a brief moment, the title actually jumped just for that. Do not fall for tricks like this, be careful and avoid cryptocurrency scams like these.
Some of the biggest companies that have started incorporating blockchain in their industries include:
- Overstock.com (OSTK), once a retail company, has become one of the biggest blockchain options on the stock market. The company has developed tZERO, a registry based on cryptocurrency and blockchain that complies with the regulations of the US Securities & Exchange Commission.
- IBM (IBM) has developed a blockchain technology that is being used with a wide variety of partners in a wide variety of industries. An example is their collaboration with food retailers, particularly Walmart, to help monitor the supply chain quickly, efficiently and safely to ensure ideal food security. They also collaborated with Maersk to work on a blockchain global trade platform.
- Hitachi (HTHIF), the Japanese conglomerate that has worked on social infrastructure and IT systems, among other industries, has begun to dabble in blockchain. He has published reports on how he believes technology can have a positive impact on the financial sector and how it could potentially be used to create new services for businesses.
There are also ETFs that can invest in that portfolio of blockchain-related stocks. For example, Reality Shares Nasdaq NextGen Economy ETF (BLCN) holds securities in all the examples mentioned above, as well as Intel (INTC) and Cisco Systems (CSCO).
Investing in mining technology
The growth of bitcoin mining as an industry has grown rapidly since the first bitcoin was mined almost a decade ago. More powerful computers and hardware are needed to give miners a better chance to successfully extract, and some companies have been involuntarily involved as a result.
Nvidia (NVDA), an investment in the Action Alerts PLUS Charitable Trust Portfolio by Jim Cramer and AMD (AMD) are companies that produce different types of technology; AMD manufactures processors for desktops and laptops, while Nvidia products range from automotive use to cloud servers. Where the two intersect with greater success, however, are their graphic processing units. Even in the ASIC miners, a strong GPU proved to be a competitive (and much cheaper) way to extract bitcoins.
This means that there was a wider demand than ever for GPUs, especially following the sudden and massive rise of bitcoins in 2017. With the explosion of mining activity and the constant need for GPUs among the players, Nvidia was an investment worth examining in 2018 AMD, meanwhile, it was a bit more volatile. They proved to be two of the leading GPU producers in the wake of bitcoin mania.
What are the other largest cryptocurrencies?
Bitcoin has not only affected other sectors; in essence he created his own. In the wake of Bitcoin, hundreds of other cryptocurrencies have popped up and tried to dethrone it or provide other uses. Many have failed, but some have survived and may have a future.
But here, more than anywhere else, it is where you must proceed with caution. Bitcoin is already incredibly risky, imagine what can result in a smaller and lesser-known cryptography. Completing a portfolio with other cryptocurrencies could help to assess the state and perhaps the future of that market, but many of them can quickly prove to be a flash of straw. The sudden increase in initial coin offerings – a method of crowdfunding new cryptocurrencies in a way that completely avoids risk capital – has many people excited about the future, but also wonders if it will create a bitcoin bubble even more dangerous.
Some of the most important cryptocurrencies, however, offer some things that Bitcoin does not do, making it more difficult to define them definitively as a bitcoin copy. It is natural to be interested in them. Do your research, discuss with your financial advisor and use common sense: do not put more money into these that you can afford. They are more risky than usual.
Some of the most important bitcoin cryptocurrency competitors include:
- Well, the token is technically an ether, but ethereum is the platform. What distinguishes it from bitcoin is that the ethereum blockchain can be used to develop apps, which will then be archived on the blockchain. Using this, you can create your own cryptocurrency.
- Ripple (XRP) is a more popular cryptocurrency recently, although some argue that we can not really talk about cryptocurrency. At present, however, it has a market capitalization of $ 19.2 billion 3rd the biggest among the cryptocurrencies. Ripple is designed to function as a payment processing system that could allow instant transfers of international money. He has collaborated with several major companies, including American Express.
- Litecoin was developed in 2011. While it has yielded its value late with other cryptocurrencies, if it recovers that value, it will be thanks to its strengths compared to bitcoin: significantly faster transaction time (a major complaint when the bitcoin exploded was that the increase in users has slowed down the transactions enormously) and a greater number of crypto tokens.
You may find that investing in bitcoins (and cryptocurrencies in general) is not worth the risks they could potentially bring. All right, sometimes it's better to prevent than to treat.
Those who decide to make an investment with bitcoins are now free to decide how their investment will go. Some are content to keep them as long-term investments. Other more aggressive people may try to start trading.
