Bitcoin is not just a digital cryptocurrency, it is also an investment tool. The principle of investing can be compared to investing in any other currency, such as dollars or euros. Even if classic currencies raise a lot of questions, the question of whether it is worth investing in Bitcoin can lead to a dead end. On the one hand, it is a promising tool that is only gaining popularity, but on the other hand, bitcoin has already established itself as a highly profitable but extremely risky investment.
The dangers of investing in bitcoin
Before you decide to invest in bitcoins, there are two things you need to do. you need to know all the dangers of investing. Bitcoin combines all the dangers of classic currencies, but the risks associated with the principles of cryptocurrency work are added to them:
- Exchange rate risks;
- Lack of centralized control;
- Indefinite legal status;
- Low prevalence;
There are always exchange rate risks when you exchange the currency in which you conduct your main business for any other currency.
This applies not only to bitcoin, but also to euros, dollars and other currencies.
The bitcoin rate is shaped by supply and demand.
In defense of a stable exchange rate, they cite the fact that the number of bitcoins is limited.
This fact is indisputable, but if we look at the history of the bitcoin rate, we will see that the currency has never been distinguished by a stable rate or some kind of long-term predictability:
No other currency in the world has shown anything like it in recent decades.
The cost of 1 bitcoin has increased from a few cents to $ 1,000 in 5 years.
In times of high exchange rate and expensive bitcoin, this was explained by the fact that the amount of currency is limited, and its production reached an unusually high level of complexity.
But everyone was waiting for a fall to marks in the region of $ 200 per 1 BTC.
Decentralization of bitcoin and the absence of a regulator - all this is positioned with a plus sign.
Yes, the absence of a regulator that could significantly affect or even worsen the position of the currency is a plus, but only on the one hand.
Lack of control breeds abuse or even insoluble disputes between participants.
It is not in vain that regulators exist to work with real currency, for example, the Central Banks.
The bitcoin system itself is as transparent as possible - all users can look into any wallet or trace any transaction.
The absence of a gendarme in the currency market, and bitcoin is a currency, is fraught with situations where one of the parties is infringed and has no opportunity to defend itself.
Scammers can steal your bitcoins.
You will not have the opportunity to find protection and return the stolen, even if you have all the evidence on hand.
Wallets are reliably protected, and the encryption system does not allow forgery of transactions.
But there are less obvious patterns.
For example, one of the largest exchanges MtGox “lost” almost 700 thousand bitcoins due to a hole in the system.
The exchange accumulated money from ordinary people and companies, and as a result, all customers lost their bitcoins.
So, the legal status of electronic currencies is under a big question, and bitcoin in Russia has not yet been able to find its place.
Since March 2016, the Russian government has actively taken up the regulation of bitcoins and is still developing a bill.
For a long time, there were rumors about the ban on bitcoins in Russia, but they never came true.
On November 7, 2016, the Central Bank again returned to the issue of crypto-currencies and called on Rosfinmonitoring and the Ministry of Finance to jointly develop a system for regulating bitcoins in Russia.
Investing money in something that does not actually have a stable legal status is a big risk.
Tomorrow, the exchange of bitcoins for rubles can be made an administrative or even a criminal offense.
They can introduce only partial restrictions on the use of bitcoin, or they can even legitimize its use.
Experts disagree, but you can watch the following video for a better understanding of the situation:
The low prevalence of bitcoins is another possible nail in the coffin of a cryptocurrency.
Any currency “works” exactly as long as it is “believed”.
For 7 years of its active development, Bitcoin has not been able to grow from an electronic currency into a full-fledged means of payment.
Surprisingly, bitcoin is more popular as a speculative financial instrument, and not as a means of payment for goods and services.
The situation may end up with bitcoin turning from currency into numbers on screens.
The numbers, with which only investors (or speculators) work, and the real buyers of currency, who use the currency to exchange for goods and services, will become so small that the BTC price bubble will burst.
Some experts predict that the technology will not be able to gain the necessary popularity and will collapse in the same place from where it all began - to near zero points in relation to the dollar.
How to invest in bitcoin
Investing in bitcoin is similar to investing in any other currency: buy at a lower price and then sell at a higher price.
Using financial instruments on the bitcoin exchange, you can also perform a reverse “sell” operation.
To do this, you need to use one of the exchanges.
The BTC-E exchange was popular in Russia.
However, it is now closed,
You need to create an account on the exchange.
If you already have bitcoins in your wallet, then you can transfer them to the exchange account for sale.
If you have neither bitcoins nor a wallet, then you can buy bitcoins for real money.
To do this, you need to deposit money into your account on the exchange.
Buying bitcoins on the exchange does not require you to have a wallet.
You only need a wallet if you want to withdraw bitcoins.
The meaning of the investment is simple - you have to predict the rate and buy the currency cheaper than you will sell it in the future.
Bitcoin differs from most real currencies in that it has high volatility.
You also have another opportunity - to "get" bitcoins, this is called mining.
Instead of buying currency, you can buy powerful computers and use their computing power to “create” bitcoins.
When you get bitcoins, you can exchange them for real money on the exchange.
For an investment, you need to calculate how much the equipment costs, how much it costs to maintain, and evaluate the computing power.
Keep in mind that the difficulty of mining is growing every day, so every day your investments will bring less and less.
There is a third option - an indirect investment in bitcoin, which is available when purchasing shares of the Bitcoin Investment Trust.
This option is one of the safest in legal terms, since you are not working with cryptocurrency, but with company shares.
The fund's shares are officially traded on the OTC market in America.
1 share of the company = 0.1 BTC.
At the time of this writing, the share price exceeded the real value of BTC by 35%.
Any of the above options for investing in bitcoin assume that you have to understand and anticipate the exchange rate.
Investments can provide you with both 10-15% monthly income and a similar loss.
Some exchanges offer the use of financial instruments, including the play of a fall, as well as "leverage".
This is available, for example, in Alpari.
All this requires an even greater understanding of the cryptocurrency, otherwise there is a risk of losing the entire investment amount.
Where to invest bitcoins
If you bought BTC or mined a certain amount of crypto-currency, but do not want to exchange it for real currency now, then you can invest bitcoin.
You do not have many options, and if you put aside dubious HYIPs and unofficial investment funds, then there will be only one option left - investing in cloud mining.
Cloud mining - getting the computing power of remote computers.
The largest service is EOBOT.
With your bitcoins, you can buy the operating time of someone else's computer.
It turns out that for your bitcoins, you will mine crypto-currency.
The profitability of such a process may even be zero if you only mine bitcoins.
Specialists use cloud mining to mine other crypto-currencies - forks.
Some of the bitcoin forks add a lot in price, but again you need to have information about which currency to mine.
Conclusion
Investing in bitcoin promises super-profits only in one case - if we expect a similar growth again.
The history of the currency rate cannot be used as a forecast of the future rate.
If you want to invest in bitcoin, you need to consider all the risks.
You might want to consider investing in other cryptocurrencies.
It is unlikely that we will see an increase from 0 to 1000, as was the case with Bitcoin.
But in percentage terms, some forks grow in price faster than BTC, and their mining does not require so much labor.
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