Bitcoin was designed to replace fiat currencies issued by the government and make them international currencies. Bitcoin has been a very volatile currency in terms of investments in assets since its inception that can be accepted by all the merchants for carrying out their transactions.
Whether you should invest in Bitcoin? It depends upon the risk appetite of the investor. Let’s learn the various ways you can invest in Bitcoins, the strategies that will help you, and the risks involved while investing in cryptocurrencies. You can keep yourself up with trading opportunities through official site .
Types of Investments
Over the past few years, there have been many ways discovered of investing in Bitcoins, including the ETFs and bitcoin trusts made by the companies related to Bitcoin.
Investing in standalone Bitcoin
The most straightforward way of investing in Bitcoin is buying a coin or merely a fraction of a coin through trading apps. While including creating an account by adding your personal details to it and then depositing some money into it, the method will be used to purchase the Bitcoin. There can be a minimum balance required by a few apps in order to buy Bitcoins.
And then, you will have access to look at all the price performance of Bitcoin and the option of buying and selling, i.e., trading in Bitcoin similar to that on any stock. All the purchases that you have brought are encrypted and kept in a wallet to ensure their safety, and only the buyer will have access to it.
Bitwise 10 Private Index Fund
The Bitcoin 10 Private Index Fund is a basket with coins in large capacity dependent upon the Bitcoin 10 Large Cap Crypto Index. The company ensures that security is provided to its users and a more uncomplicated ETF handling. This requires a minimum investment of $25,000, and it has a fee ratio of approx 2.5%. It holds its assets in offline mode, i.e., cold storage, and provides the investors’ utmost security.
Amplify Transformational Data Sharing ETF (BLOK)
BLOK is a fund that is managed actively, and more than 15 industries have its holding. The New York Stock Exchange trades this ETF. The net expense ratio of BLOK is 0.70%. The investment is made in the companies that develop the blockchain technologies or are involved in them.
Investors can access the market through Greyscale’s Bitcoin Investment Trust (GBTC) when they wish to enter it through the capital markets. There are some advantages of investing in Bitcoin through Greyscale as it becomes a little more feasible option to consider. These shares can be held in many of the investor and brokerage accounts that will allow the user to access a various range of accounts at different levels. A product that is valued at around one-tenth of the valuation of Bitcoin is being provided to the investor. There is a maintenance cost of about 2% involved in GBTC.
The investors prefer these due to the ease of handling, security that is providing and the ease of conversion into cash, i.e., its liquidity. This is a comfortable option for the users who are not aware of the technology and will have safer access to the market of Bitcoin, as a more potent storage mechanism is being arranged for them offline.
Strategies of Investment
Buy and HODL
Hodl is a misspelling of hold that is done intentionally and used for holding the Bitcoins by the community of investors of Bitcoin. A “hodler” is an investor who is holding the Bitcoins.
People purchase and hold their cryptocurrencies in order to invest Bitcoins.
Short Positions on Bitcoin
When the investors believe the values of Bitcoin will decrease, this might be due to some rapid increase in the prices. They sell their Bitcoins at higher values and then purchase them back later when the prices fall.
Long Positions on Bitcoin
Some investors purchase the Bitcoins and then send them when the prices increase to make immediate profits. This can be done in several ways and included believing that the volatile prices are about to provide high returns and the market is going to be favorable.