The question is cryptocurrency a good investment is rather common. Basically an answer on request, is investing in cryptocurrency a good idea, is positive.
The undisputed leader in digital money is Bitcoin. This is the first cryptocurrency to occupy more than half of the market, at the moment its share is 58.6%. However, there are tons of other decent blockchain projects that deserve attention.
Buying only bitcoin is a mistake, you must remember the diversification rule. It states that one asset should occupy no more than 10% of the portfolio, explained Andrey Berezin, Managing Partner of Raison Asset Management. According to him, it is risky to make a portfolio only from cryptocurrencies, even if they are different.
Where to Invest in Bitcoin
Most people ask, where can i invest in bitcoin. Let’s consider the three most popular options for buying cryptocurrency:
- The first is to buy bitcoin from a cryptocurrency exchange service. This is one of the easiest options for people who do not deeply delve into the essence of technological processes, but want to invest;
- The second option is buying cryptocurrency on exchanges. We recommend working only with well-known and stable exchanges;
- The third option is cryptomats.
If you don’t know, where to invest in cryptocurrency, use one of this options.
Advantages of Bitcoin Investments
A profitable investment due to the technical characteristics of the Bitcoin cryptocurrency is the main reason for investing money by users of virtual wallets and novice “rich”. What is the best cryptocurrency to invest in 2020? It’s definitely Bitcoin.
Digital coins have a number of unique abilities that inspire confidence in many people who are familiar with them. They are tightly intertwined next to external factors that push to invest in bitcoins. The main ones are:
- Leading position in the cryptocurrency market. The Bitcoin system has been considered a leader among its many competitors since the creation of cryptocurrencies. The list of digital money grows every year, and Bitcoin’s position still remains in first place. Due to the clear leadership, most users prefer to invest in bitcoins;
- Growth of cryptocurrency. Whatever fluctuations in the exchange rate happened in the entire history, bitcoins quickly “rose from second place” and topped the lists of cryptocurrencies, despite the fact that they often talk about disappointing forecasts for this digital currency;
- Statistics. Cryptocurrency capitalization is now about $ 200 billion, half of which is in the Bitcoin system;
- Self-sufficiency of cryptocoins. Thanks to virtual coins, you can pay for purchases confidentially, thereby excluding the possibility of inflation of digital funds. An important factor is that the cryptocurrency has a limited edition. Payment transactions are carried out with the lowest commission rate, which cannot be said about the existing analogues;
- Unlimited currency growth potential. There are many ways to earn bitcoins: anonymous purchase, cloud mining, the use of computing power, earnings on the difference in exchange rates, savings, etc;
- Bitcoin liquidity. Exchange of cryptocurrency for the usual cash. It is carried out using a card, linked to Bitcoin, through an ATM or by transferring funds to a bank account;
- Bitcoin volatility. For the level of the global economy, the Bitcoin system is still very small. Therefore, it is believed that the main growth of the currency is still ahead. For this reason, investment in cryptocurrency will increase;
- Worldwide recognition. Most countries in Europe and Japan have recognized Bitcoin as money. The USA considers digital coins to be an investment asset with the required payment of taxes in case of profit.
Bitcoin is a stable digital virtual coin system that has an established reputation.
Thanks to the Internet and television, more and more people are learning about Bitcoin. Many want to get hold of a small portion of the coins, thereby increasing the demand and price for them.
All factors speak only of the prosperity of Bitcoin in the future. Therefore, it is profitable to invest in digital currency now.
Disadvantages of Bitcoin Investments
With all the advantages of bitcoin, there are also disadvantages of investing in it, as well as some risks that any investor should pay close attention to. The main ones include the lack of an equivalent of the value of the cryptocurrency, the uncertainty of the regulatory authorities, hacker attacks and anonymity, which has a double assessment.