Bitcoin continues to reach new heights, which attracts both non-investors and investors alike. However, the majority of people buying it are doing so to gain from its growing value, rather than to take advantage of its unique attributes.
However, with the constant ups and downs witnessed with Bitcoin, is it worth investing in it?
What is Bitcoin?
Before we get into the ins and outs of investing in Bitcoin, it’s important to understand just what Bitcoin is.
Bitcoin is a form of digital currency, which means there’s no paper money or coins physically representing it. It was first established in 2009 by an anonymous party, and exists today as a fully-electronic source of money. What’s really interesting, though, is how Bitcoin doesn’t have any real intrinsic value. Because it’s not a tangible source of money, the value of Bitcoin is, essentially, determined by what someone thinks it’s worth.
Unlike a country’s currency, which is constantly regulated by its government, no one has control over Bitcoin and there aren’t any ‘Bitcoin banks’. Instead, when you buy Bitcoins, these are stored in the cloud or on your computer in a ‘digital wallet’. There is a downside to this – your Bitcoins aren’t insured by FCSC if they become lost or stolen; but on the other hand, you aren’t going to get any third-party interruptions from banks, governments and other financial institutions.
Why is Bitcoin Growing in Popularity?
Trading in Bitcoin is now at an all-time high, which is why it’s becoming so popular around the world. And the real reasons for this are due to its unregulated and anonymous nature, meaning people can buy things anonymously and without hefty transaction charges or tax.
Furthermore, Bitcoin provides a great safety net for people who want to protect their wealth from their country’s volatile currency. This is particularly beneficial in countries that don’t have much political stability, as Bitcoin enables them to remove their monies from the risk of currency and government collapse.
Another hugely important reason for Bitcoin taking off is how many businesses are starting to take note of Bitcoin, both offline and online, and are therefore accepting it as a method of payment for their services or products. For example, Bitcoin can be used as a form of payment for online casinos found at gamblinginsider.ca, retailers, software and much, much more.
And as more companies start to accept Bitcoin, it gives it more usability, which, in turn, will increase how valuable it is. In fact, hedge fund expert, Michael Novogratz, suggests that by the end of 2018, Bitcoin could ‘easily’ reach $40,000; also adding that Ethereum (another form of cryptocurrency) could triple where it is now ($500). Furthermore, on CoinMarketCap, the total market capitalisation of all cryptocurrencies reached $304 million in November of this year, with Novogratz anticipating that it could increase to $2 trillion in just a year.
So, can you make money from Bitcoin? The answer is, undoubtedly, yes, particularly as cryptocurrency continues to grow in popularity and value. However, don’t jump in without some careful planning first so you can be absolutely sure you’re able to handle its rather volatile nature.