Bitcoin is one of today’s most popular cryptocurrencies. In fact, it’s endorsed by many governments worldwide. Many people are also looking to invest in Bitcoin, but is it a risky investment? Just like any other investment tool, Bitcoin carries some risks as well. For instance, a crashed hard drive or hacking can wipe out your collection of Bitcoin. The coin’s price could drop suddenly, as well. For more information you can visit here cfds-trader.com
Bitcoin has seen intense fluctuations in price movement, but it has always retained a substantial part of its past gains each time it drops. But the decision to invest in the coin, depending on how much risk you are willing to take. Bitcoin is a risky investment tool because it is extremely volatile. However, most of the risks associated with Bitcoin are outside of an investor’s control. That’s why it is important to stay up-to-date with any developments in the cryptocurrency market, especially if you’re a serious investor.
How to Reduce the Risks Associated with Bitcoin
Fortunately, investors can reduce the risks associated with cryptocurrencies. You only need to learn how to properly and safely store Bitcoin. The first thing you should do is remove your Bitcoin from the exchange, especially if you want to regularly trade the swings. Leave your coins where you can access them easily. But if you’re planning to hold on to your coins for a long time, you should look for some cold storage.
The most secure and cheapest way to store cryptocurrencies is to use paper wallets. Hardware devices such as debit and credit cards are more convenient to use compared to paper wallets, but they’re less secure. The risk is minimal, and as long as you don’t lose the hardware device, your funds will remain safe at all times. You can also split up your investment. Allocate 1/3 to a hardware device and 2/3 to two separate paper wallets. Store these wallets in different secret locations to protect them from natural disaster-type incidences or prying eyes.
How to Invest in Bitcoin
One of the easiest ways to invest in Bitcoin is by using an online broker. First, you need to open an account with the online broker of your choice and then deposit funds into your account. You can then buy Bitcoins and later sell them to earn profits. However, these steps depend on the exchange or trading platform used. Some of the most popular brokerages today include:
- Coinbase
Coinbase allows you to buy Bitcoin by connecting a bank account or using a debit card. The best thing about Coinbase is that you can buy BTC with a $0 account minimum. You need to create your account, then verify your identity, and buy Bitcoin. Coinbase has a mobile app, so you can take control of your investment wherever you are. You can also convert Bitcoin into another cryptocurrency, transfer it to another account or spend the coins on expenses.
- Tradestation
Trade Station’s smart execution algorithm, innovative pricing, and pooled liquidity offer the best trading prices to investors. It consolidates liquidity from different avenues such as exchanges and OTC desks to offer a broad liquidity pool in the crypto market. To get started, you only need to open an account, and then you can start investing.
- eToro
eToro allows users to trade cryptocurrencies, connect with traders, and discover professionally managed portfolios. The platform supports the sale and purchase of Bitcoin, Bitcoin Cash, Ethereum, Dash, Ripple, Cardano, Litecoin, MIOTA, Ethereum Classic, Zcash, Stellar Lumens, TRON coin, NEO, Tezos, and EOS.
Conclusion
As mentioned, Bitcoin is a rather risky investment. Aside from being extremely volatile, it’s not regulated by any government. However, it is not difficult to buy or sell Bitcoins. Bitcoin should be classified under high-risk, high-reward portfolios. So, try to make a small investment first to minimize the risks and reduce your losses. And then, you can increase your investment once you get the hang of it.