Bitcoin (BTC) captured the imagination of investors globally after it first started trading in the early 2010s.
Mainstream Wall Street financial investment firms and hedge fund managers are looking to include bitcoin in the portfolios of their clients. Some even consider BTC to be a safe-haven investment. The tribe is growing by leaps and bounds with every passing day.
Eager to join this rapidly growing community of bitcoin investors, yourself? Then, there are a few things that you need to consider. Before making the move.
Study About Bitcoin
Bitcoin is a very different asset as compared to its traditional counterparts. Make it a point to go through the details of how it works, the underlying mechanism, etc.
Start by reading the white paper. You can also check out our bitcoin 101 article. https://wazirx.com/blog/what-is-bitcoin/
Go Through BTC Development Activity
A cryptocurrency’s success can be gauged from the development activity surrounding it. Bitcoin has a thriving community of developers and contributors on Github. All of them work to keep Bitcoin Core, bitcoin’s open-source software alive and running.
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As a part of your study, you can check out all the entries there. The video below also gives an insight into bitcoin’s development progress from 2009-2018.
Analyze the Market
Market analysis is crucial and mandatory. The bitcoin market has showcased incredible efficiency with 99.98% uptime since its inception in 2009. But, it still makes sense to do some research on how it has grown since the very beginning.
Bitcoin has the largest market capitalization amongst all cryptocurrencies. The latest figures point at a $175 Billion valuation. It represents the size of the entire bitcoin market and is calculated by multiplying BTC’s price with the available supply.
Since we mentioned supply, it is imperative to mention that bitcoin has limited supply and issuance. At the current rate, approximately 900 bitcoins are created every day which will keep diminishing until the cap of 21 million coins has been reached. As of writing, around 18.4 million BTC are in circulation.
Be a Part of Bitcoin Communities
Your own study and research can seem insufficient sometimes. The bitcoin market is evolving and so are the communities talking about BTC. When it gets daunting to figure out ways to invest, relevant groups can save your day. Become a part of Telegram forums like IndiaBits, Bitcoin India, WazirX to learn more and stay updated.
Keep an Eye Out for Scammers
You must know that like every other investment market, the bitcoin space too has its share of scammers. Cybercriminals try different methods to convince you to give up your BTC.
Sometimes they pose as someone you trust. Other times they just pick up your email, cell phone numbers, etc. right from your ‘accounts on the internet’. You must be aware of the tricks employed by these online robbers and plan adequate security for your BTC investment.
Learn Technical Analysis
Stock market traders heavily use technical analysis to place their trading/investment bets. The tools are highly reliable and can be used extensively to make prudent investment decisions.
In your study and research, you will come across a variety of crypto technical analysis (also called TA) articles on the internet. These articles quantify trades and help investors make informed decisions. Consider learning TA to benefit from your crypto-asset investments.
In India, the National Stock Exchange provides several live courses for beginner traders and investors. The material may be designed for traditional financial markets but can be used for cryptocurrency trading and investment as well. You can check them out here: https://www1.nseindia.com/education/content/online_courses.htm
Be Prudent in Investing
Bitcoin is an asset with a high risk/reward ratio. This means that the returns potential and the possibility of losses both are extremely high.
Right from the start, you should be careful in allocating funds. Invest in bitcoin using only the money that you can afford to lose.
And like all other assets, it just doesn’t end with the investment. You must make it a point to track the value of your funds. You can check the latest bitcoin price movements in the ‘Markets’ section on the WazirX app. For more information on how to use the app, check out this video below:
Bitcoin investment can open up new opportunities for wealth creation. There is a learning curve involved that needs to be traversed diligently first. The aforementioned tips will provide you with the necessary impetus in building a strong knowledge base regarding Bitcoin‘s mechanism and market structure. We just want to ensure that your journey in becoming a successful and sustainable bitcoin investor begins with a solid head start.
Further Reading:
4 Things to Consider Before Investing in Cryptocurrencies
8 Benefits Of Investing In Ripple (XRP)
Why Start-ups Should Consider Using Bitcoins
5 Things to Keep in Mind While Buying or Selling Ethereum
Frequently Asked Questions
How Many Bitcoins Are There?
There are 18,730,931.25 Bitcoins in circulation as of June 2021. The total number of Bitcoins that would ever be there is just 21 million. On average, 144 blocks are mined every day, with 6.25 Bitcoins per block. The average number of new Bitcoins mined every day is 900, calculated by multiplying 144 by 6.25.
Is Ethereum Safe To Invest?
The Bitcoin market is unquestionably more volatile than the stock market. This may not be the market for you if you are incredibly risk-averse. Ethereum, on the other hand, may be a terrific investment for you if you're a diamond-handed investor who won't lose sight of short-term losses. Ethereum is a relatively safe investment as it is also based on blockchain.
How To Convert Bitcoin To Cash?
There are many ways of converting Bitcoin to cash, such as crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, Peer to Peer Transactions. You can use cryptocurrency exchanges such as WazirX for this. Unlike typical ATMs, which allow you to withdraw money from your bank account, a Bitcoin ATM is a physical location where you may buy and sell Bitcoins using fiat currency. Several websites provide the option of selling Bitcoin in return for a prepaid debit card that may be used just like a standard debit card. You can sell Bitcoin for cash through a peer-to-peer platform in a faster and more anonymous manner.
What Is Meant By Bitcoin?
Bitcoin is a digital currency that was initially released in January 2009. It is based on ideas offered by Satoshi Nakamoto, a mysterious and pseudonymous figure, in a whitepaper. The name of the person or individuals who invented technology has not been revealed. Bitcoin promises lower transaction fees than other online payment systems, and unlike government-issued currencies, it is decentralized.
What Is Bitcoin And How Does It Work?
Bitcoin is decentralized digital money that may be bought, sold, and exchanged without an intermediary such as a bank. Bitcoin is based on a blockchain that is considered to be a distributed digital ledger. As the name suggests, blockchain is a linked database made up of blocks that store information about each transaction, such as the date and time, total amount, buyer and seller, and a unique identifier for each exchange. Entries are linked in chronological order to form a digital blockchain
What Are The Chances Of Bitcoin Crashing?
Two Yale University economists (Yukun Liu and Aleh Tsyvinski) produced research titled "Risks and Returns of Cryptocurrency" in 2018. They looked at the possibility of Bitcoin crashing to zero in a single day. The authors discovered that the chances of an undefined tragedy crashing Bitcoin to zero ranged from 0 percent to 1.3 percent and was around 0.4 percent at the time of publishing, using Bitcoin's history returns to determine its risk-neutral disaster probability. Others claim that because Bitcoin has no intrinsic value, it will inevitably crash to zero. On the other hand, Bitcoin advocates argue that the currency is backed by customer confidence and mathematics.
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."
How Much Is 1 Bitcoin Worth Today?
Check out the current price of Bitcoin on the WazirX exchange. Bitcoin's value is primarily determined by its supply and demand in the market. Other elements have an impact on its worth. Its intrinsic value can also be calculated by calculating the average marginal cost of producing a Bitcoin at any given time, based on the block reward, electricity price, mining hardware energy efficiency, and mining difficulty.
What Is The Safest Cryptocurrency To Invest In?
Bitcoin has had the highest market capitalization, has been around the longest, has the most experienced development team, and has enormous network impact and brand recognition. As a result, while trading cryptocurrencies, the rate of return on Bitcoin is commonly used as a benchmark. However, the risks associated with cryptocurrencies remain, and the safest cryptocurrency for you depends on your analysis.
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