How to Start Bitcoin Investment
Would you take the risk to start investing in Bitcoin? Well you are not the only one desiring to be a Bitcoin investor considering how promising it can be. For you information, Bitcoin is an electronic currency that has been taking its place to make change in the world. At the same time, it also becomes a highly volatile financial asset type. It’s highly volatile that many governments do not recognize Bitcoin as currency. However, more merchants have started to accept Bitcoin and make this electronic currency more popular than before.
Bitcoin as Volatile Asset
How volatile is Bitcoin? Well, the fluctuations can be very dramatic indeed. For instance, in April 2013, the value of Bitcoin jumped so high that it reached $140 from only $40 before. It definitely made the world gasped. And in this year, the value gets even much higher reaching more than $1000. But it is also possible that the value to slip back down. This fluctuation shows that lots of money can be made from it and this has made Bitcoin very interesting electronic currency.
When it comes to ways in acquiring Bitcoin, there are some ways available. For instance, one can mine Bitcoin or to exchange their money into Bitcoin using the fiat currency. However, the exchanges can turn to be quite tricking considering how highly unreliable the exchanges can be. The list of the Bitcoin exchange, the reputable ones include Coinbase, Coinfloor, Virtex and QuadrigaCX. Usually, each of the exchanges has their own rules.
Buy and Hold
In managing Bitcoin investment, what an investor should do is to buy and hold or buy and forget. This strategy targets the biggest profit that can be obtained as the investor waits for the value at its highest before he sells it. This strategy is the best one in terms of Bitcoin investment considering how highly volatile Bitcoin can be both in short and long term. It is also a better one compared to strategy that targets immediate return.
Understand the Risk
Every Bitcoin investor should be aware of the risk in Bitcoin investment because of its volatility. In the Bitcoin marketplace itself, the trading activity volume is relatively low which means there is not much liquidity. Low liquidity causes high volatility. As a result, it is normal to say that the Bitcoin markets can be relatively irrational. But don’t let this scares you away. Understand that every investment comes with risk. Therefore, what you need to do is to know everything that you do.