Many of you ought to be thinking about investing in Bitcoin seeing its meteoric rise within the last two years. Once known as a risky and senseless investment, cryptocurrency holders today are laughing their way to the bank while most of us are sitting here meddled between deciding to invest or let go of that inclination.
In this post, we will provide you with the 5 basic things to know before you go about investing in cryptocurrency:
1.The Cryptocurrency market is volatile:
The first and foremost thing one ought to understand before investing in cryptocurrency is to understand the fact that this market is extremely volatile. It's not an uncommon fact for the price of cryptocurrency to fall more than 10 to 20% on a single day. That’s right.
Many think they are risk tolerant for this market and all it takes is one bad day to know how much volatility can they actually afford. So, understand the risk of investing here.
2.More than one option:
Everyone is talking about Bitcoins only but it is one of the many cryptocurrencies available in the market today. Bitcoin may be the dominant cryptocurrency right now but its share in the whole crypto-market has fallen drastically from 90% to 40%.
If you want to still go for Bitcoin, well that’s your choice but there are other options available as well like Ethereum, Ripple, Litecoin, Monero etc. If you are looking for more such news on cryptocurrencies, then be sure to visit Bargain Hunter’s blog.
As cryptocurrency is digital currency, there is always the risk of safety, most prominent being hacking. You are most better off keeping and stashing your cryptocurrency by yourself rather than making use of cryptocurrency exchange services. In a recent news, $60 million of bitcoin was reportedly stolen.
Create backup if you need and store it on a USB stick or you can download a free software to store your cryptocurrency. There are many such options available at your disposal.
The very nature of cryptocurrency is built on anonymity. This means that every recorded transaction is encrypted so one can never know who actually holds what amount of cryptocurrency in their pockets.
This makes it a safe online investment and also safe from tax exemptions, at least in a majority of countries around the world. You can score a four-fold increase in your investment and cash out and not be liable to pay a single dime to the government.
We, however, aren’t implying that you skip on your taxes though.
5.Best time to invest:
There is as such no rule of thumb when it comes to investing in cryptocurrency. Cryptocurrencies are the best investments in today’s time butit is advisable to not buy during the peak of a bubble.
The best time to invest is when the price is stable at a relatively low level. Understand the fact that crypto bubbles are not like traditional financial bubbles so weigh your decisions accordingly.
So there we have a comprehensive list of the 5 things one ought to know before investing in cryptocurrency. Good luck out there.