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One might consider it a future possibility, a magnificent one at that, that traders would be able to buy stocks in Bitcoin. As of now, no, you cannot buy shares or stocks in Bitcoin. There have been ample instances when early-adopters have earned millions by simply holding the bitcoins in their wallets for Bitcoin continues its bull-run, hovering near the $20,000 mark for the longest time. Several Bitcoin and other cryptocurrency scams have robbed investors of their money, though some awareness campaigns have helped bust such bitcoin myths.
The Curious case of Bitcoin Inc: One such new scam encompasses persuading investors to believe that Bitcoin was some kind of stock released by a corporation, which is blatantly false. Bitcoin comes into existence via bitcoin mining over a blockchain and isn’t introduced by any central agency. This tactic belongs to an elaborate operation started by an organization called Bitcoin Inc. Unsuspecting investors with no knowledge of how a Bitcoin operates might mistake it for the real Bitcoin. The shareholders of Bitcoin Inc. want to give the impression that their organization was behind Bitcoins’ issuance.
The information on their site says there is a “21 million BTC maximum limit and 1000 Bitcoin Inc full corporate shares maximum limit.” Their one corporate share is equivalent to 10 bitcoins. While we all know that the total number of bitcoins is limited to 21 million, the last bitcoin would not be released until 2140. The website calls out to the investor who missed out in 2010 to hold any amount of USDCX fractional shares in their wallet.
The misinformation cited on the website is enough to dissuade any investor from investing any further. But a naive investor can easily fall into the trap. But since Bitcoin is no brand and has no corporation backing, it’s name is perfectly suited for scammers to gauge money from innocent investors by unscrupulous means.
Though Bitcoin shares might be considered a future possibility, despite the perverted scams, there’s a significant hitch in the provision of such a service as a classical stock exchange and a cryptocurrency exchange function quite differently.
Investing in Bitcoin can be highly rewarding and is directly proportional to your appetite for risk. The past decade has seen multiple ways to buy Bitcoin in India and worldwide, with popular cryptocurrency exchanges like WazirX supporting trading in Bitcoin, Bitcoin trusts Like GBTC (Grayscale Bitcoin Investment Trust), Bitcoin derivatives, and even ETFs of Bitcoin-related companies. Let’s dish out some ways of investing in Bitcoins:
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Buying coins via a crypto exchange or trading platform
The first and most obvious way is to buy a coin or a fraction of the coin via an online cryptocurrency exchange or crypto trading apps like WazirX. Such apps provide a user-friendly, interactive, and secure interface to purchase Bitcoin and other altcoins.
You can access Bitcoins’s price performance by keeping a tab on India’s Bitcoin live price via such apps. All you need to do is to set up an account on the platform. The platform might require some personal information and KYC, after which you can deposit money and purchase bitcoins. The purchased bitcoins are stored in an encrypted bitcoin wallet assigned to you.
Buying shares of GBTC
Investors wanting to go the capital market route can access Bitcoin investment through the Grayscale Bitcoin Investment Fund (GBTC). Under GBTC, a product that tracks the 1/10th value of a Bitcoin is provided to the investors. For instance, if Bitcoin is valued at USD 10,000, each share of GBTC would have a NAV of USD 1,000. This value includes a 2% fee maintained by GBTC that has an impact on the overall value.
GBTC arranges offline storage mechanisms to allow less technically versed investors to invest safely in Bitcoin. There are certain advantages of holding a GBTC share. Shares of GBTC are eligible to be held in certain IRA, Roth IRA, and other brokerage and investor accounts, allowing easy access to all levels of investors. It provides security, liquidity, and ease of use to the investors.
Investing in Bitcoin Derivatives
Some investors like a more immediate return through Bitcoin trading and like to sell it at the end of a price rally. Once the market moves in their favor, the investor sells off his Bitcoin investment. Such speculative trading for high returns in Bitcoin is based on the Bitcoin market’s high-volatility and is termed a long position.
At other times, the investors might predict the decreasing value of Bitcoin. Investors adopt short positions and sell their bitcoins to buy them at a lower price in the future. This case scenario happens especially during a Bitcoin bubble.
Bitcoin Futures and options are some crypto derivatives that offer the investors the benefit of liquidity and returns without the volatility and risk involved in direct trading. A derivative is a class of financial contracts that derive their value from an underlying entity’s performance, in this case, Bitcoin.
Investing in Bitwise 10 Private Index Fund
Based on the Bitwise 10 large Cap Crypto Index, the Bitwise Private Index Fund is a large-capacity basket. In such a fund, the company attempts to provide the security and ease of a traditional ETF. It requires a minimum investment of USD 25,000 and has a fee ratio of 2.5%. The funds are stored in cold storage, ensuring optimum security to investors.
While investing via any of the above-mentioned channels, the investors must be wary enough to trade via a regulated exchange or body and keep a few considerations in mind. Bitcoin has undergone dramatic fluctuations but can ensure phenomenal returns in the long term as the world sees blockchain technology and cryptocurrencies gaining traction. But for Bitcoin shares, they are non-existent!
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Frequently Asked Questions
How Many Bitcoins Will Ever Be Created?
The source code of Bitcoin stipulates that it must have a restricted and finite quantity. As a result, only 21 million Bitcoins will ever be generated. These Bitcoins are added to the Bitcoin supply at a predetermined rate of one block every ten minutes on average. The supply of Bitcoins will be depleted once miners have unlocked this number of Bitcoins. It's possible, however, that the protocol for Bitcoin will be altered to allow for a higher supply.
How Bitcoin Mining Works?
Bitcoin mining is a crucial element of the blockchain ledger's upkeep and development and the act of bringing new Bitcoins into circulation. It's done with the help of cutting-edge computers that solve exceedingly challenging computational arithmetic problems. Auditor miners are rewarded for their work. They're in charge of ensuring that Bitcoin transactions go through smoothly and legitimately. This standard was established by Satoshi Nakamoto, the founder of Bitcoin, to keep Bitcoin users ethical. By confirming transactions, miners assist in avoiding the "double-spending issue."
Can Bitcoin Be Converted To Real Money?
Crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, and Peer Peer Transactions are all options for converting Bitcoin to cash. This can be accomplished by using Bitcoin exchanges such as WazirX. A Bitcoin ATM is a real place where you may purchase and sell Bitcoins with cash, unlike standard ATMs that allow you to withdraw money from your bank account. Many websites provide the option of purchasing Bitcoin in return for a prepaid debit card that works similarly to a standard debit card. Through a peer-to-peer marketplace, you may sell Bitcoin for cash faster and more privately.
Is Bitcoin Legal In India?
In India, Bitcoin is not illegal. Because of cryptocurrency's rapid evolution, policymakers and regulators seemed to have recognized the chance to accept the new technology early. From the infamous 'RBI ban' in 2018 to reports of an impending bill banning cryptos in 2021 that has yet to develop, India has seen its fair share of ups and downs when it comes to Bitcoin regulation. Last year, the Supreme Court Of India approved the use of Bitcoin throughout the country. According to the Supreme Court, the existence of Bitcoin or any other cryptocurrency is unregulated but not unlawful.
What Is Bitcoin Used For?
Bitcoin was created as a means of sending money over the internet. The digital currency was designed to be a non-centralized alternative payment system that could be used in the same way as traditional currencies. Bitcoin is being used by an increasing number of businesses and individuals. This includes establishments such as restaurants, apartments, and law firms.
Is Bitcoin Trading Is Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
Is Bitcoin And Cryptocurrency The Same Thing?
Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.
What Type Of Currency Is Bitcoin?
Bitcoin is a type of digital currency or cryptocurrency. In January 2009, Bitcoin was established. It's based on Satoshi Nakamoto's ideas, which he laid out in a whitepaper. The name of the individual or people who invented the technology remains unknown.
Is Bitcoin Mining Free?
Bitcoin mining isn't free, but it can be tried on a budget. Bitcoin mining is an essential part of the blockchain ledger's upkeep and development and the act of issuing new Bitcoins. It is accomplished by the use of cutting-edge computers that tackle complicated computational arithmetic problems. The effort of auditor miners is rewarded. They're in charge of ensuring that Bitcoin transactions go off without a fuss and that they're legal.
How Does Bitcoin Technology Work?
The blockchain is the foundation of Bitcoin. It is a decentralized, distributed ledger that tracks the provenance of digital assets. The data on a blockchain can't be changed by design, making it a real disruptor in industries like payments, cybersecurity, and healthcare.
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