Sunday, November 15, 2020

What to Know Before Consider Investing in Bitcoin

 If you’ve paid attention to the financial world within the last few years, you may remember hearing about the cryptocurrency craze.

Cryptocurrency, particularly bitcoin, exploded almost overnight. The result was incredible. Suddenly, everyone began to take cryptocurrencies seriously. Even NASCAR got in on the action at one point with a Dogecoin sponsored vehicle:

But in the years since, the word on bitcoin has been decidedly quiet. Bitcoin is still useful and popular but investing in it will take a bit of knowledge. So what should you know about bitcoin? Read on to find out.

Just Like With Normal Currencies, The Bitcoin Market is Volatile

The first and most important thing to note about bitcoin is how its market fluctuates. While you should always expect fluctuation within a market, bitcoin is a different beast.

What makes it so special? For one thing, it’s a relatively new currency, so the regulations aren’t as concrete. And since the regulations aren’t necessarily in place, the market is in a constant state of chaos. There isn’t an official price, so your investment could tank within a matter of minutes. In fact, it isn’t uncommon for the value of bitcoin to decline throughout the day.

As of the time this article is written, the current going rate for one bitcoin is estimated at 2439.93 in US dollars. However, this can change on an almost minute by minute basis. Accordingly, the cryptocurrency has gained a bit of notoriety amongst the financial world. If you’re going to invest in bitcoin, please realize that you’re taking a massive risk.

When to Invest

If that doesn’t sound chaotic enough, let’s discuss when you should invest in bitcoin. In short, there’s no real answer here. Since the market moves so rapidly and you aren’t dealing with 9-5 trading, you’re competing in a 24/7 global market.

Accordingly, this means that to invest requires more than just the proper finances. It also requires a great deal of your time. Our site offers a fantastic economic calendar to help you keep track of the financial markets if you’re interested.

Where You Can or Can’t Use Bitcoin

Most of the corporations that accept bitcoin are internet-based themselves. Companies from WordPress to Reddit accept the currency as a valid source of payment. But don’t expect to pay for your next pizza or shopping spree with bitcoin.

It’s currently viewed as too unpredictable to be accepted in most brick and mortar stores. If this seems like a potential issue, be sure to consult an online list beforehand.

How to Invest in Bitcoin

So far we’ve discussed most of the bitcoin basics. Now we’ll focus on how you can procure the digital currency for yourself. While you’re free to buy and sell from others on the market, the investment process itself is a bit different. The bitcoin investment process is referred to as “mining”. It’s an almost gamification of the investment process.

Users use a special software to make their way through complex mathematical algorithms. Upon success, the user is rewarded with a small amount of bitcoin for their trouble.

What’s the idea behind this odd process? Since is isn’t centralized and functions on a peer-to-peer basis, the goal is to get others involved. In essence, every single user owns a stake in the bitcoin game. The thought process is that the more people using bitcoin, the stronger the economy.

We understand that your head may be spinning right now! Don’t worry, we’d love to answer any and all questions on how to invest in bitcoin.