If you are thinking of parking your investment into the most widely known cryptocurrency, Bitcoin, and are skeptical about whether it’s worth putting even 100 USD in it, then this article is for you. If it is your first expenditure in Bitcoin, let us look into the following factors you should remember before you take a chance.
A Bit About Bitcoin
Bitcoin recently celebrated its 14th birthday on 3rd January, marking the first mining of the genesis block by its pseudonymous founder Satoshi Nakamoto. It is a decentralized currency with no individual, institution, or government exercising any control over it. It works through cryptocurrency miners or a network of computers where every transaction is tracked, recorded, stored, or exchanged utilizing a digital ledger known as the blockchain. As many computers across the globe have a copy, this record is massively hard to exploit. Bitcoin is based on encryption making it exceedingly secure and universally accessible. However, please remember that Bitcoin might not be a suitable investment option for everyone. If you are worried about what might go wrong, it is best to park money less than what you can afford.
Is Investing in Bitcoin Profitable?
Sinking money into Bitcoin should depend on how much return you expect and your ability to withstand risks. It is difficult to determine or say with certainty that Bitcoin will yield sure profit in the future primarily because Bitcoin price is highly volatile. You have to use your better judgment before making any investments. You can compare the live bitcoin price chart to know where the price of bitcoin stands with respect to USD. Trading in such volatile currency can be immensely profitable but also precarious at the same time.
Is it Okay to Invest in Bitcoin for a Novice in This Domain?
The simple answer to this question is no. The crypto world is a new marketplace altogether where you can make whopping gains and vice versa. You must have enough knowledge about Bitcoin and other cryptocurrencies, how to trade them, the associated risk, the rate fluctuation pattern, and more. A tad bit of investing experience can save you from making losses. However, always remind yourself that investing in the stock market and this domain can be hugely different. You can create an account to start the trade with a computer at your disposal and ten minutes to spare. Some exchanges will even help you buy Bitcoin and several other cryptocurrencies right after your account is ready. You might get excited to invest in digital currency or have complete faith in blockchain technology, and this can propel you to invest in Bitcoin but to be on the safe side, beginners should avoid this asset class for now.
Is Bitcoin Worth It?
- Bitcoin is globally transparent, and anyone can independently verify the total supply and balance of each account.
- Unlike bank accounts, anyone anywhere can connect to the Bitcoin network.
- It is a fixed and predictable monetary supply that will only ever be 21 million. This can be treated as the digital version of gold. The scarcity of this asset class boosts its total value, which is why it can be highly profitable for individuals especially interested in putting their money into digital currency.
Why Should You Invest in Bitcoins?
- The scarcity and all funds being recorded transparently offer it immunity against forgery. Hacking the network effortlessly is out of the question because it is backed by secure blockchain technology.
- There is no interference from banks or the government.
- It is inconspicuous, as you don’t need to submit personal information while setting up a bitcoin wallet.
- The Bitcoin network is running 24/7 without any interruptions.
- Transaction fees are much lower when compared to international money transfers.
Is There Any Drawback?
- If an account is hacked, it is unlikely that you will be reimbursed because it is not insured by FDIC.
- As mentioned earlier, it is highly volatile. Hence, an investment can grow ten folds or yield very little return, or if things get worse you might end up losing all your money.
If you are a savvy investor who has done his research and is looking to dip your toe into the Bitcoin water, investing your first 100 USD could be a good start before taking a deeper plunge. However, cut your coat according to your cloth, and don't get impulsive. It all depends on your better judgment and your investment needs.
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