Should You Invest in Bitcoin in 2022? | BitTrust IRA
What Exactly Is Bitcoin, and How Does It Work?
Digital money that you use online is not that hard to understand on its own. Most of us know how to move money from one online bank account to another.
Cryptocurrencies like bitcoin are digital assets that work like regular money, but there are some important differences. They use ways to pay each other directly, so the banks don’t get a cut of every transaction. The coins don’t even exist in the real world.
Each bitcoin is made (or “mined”) from a string of numbers and letters that make up an encrypted code. The code can be “unlocked” with the same equation used to make it (like a virtual key).
Other things you need to know about bitcoin:
- Cryptocurrencies like Bitcoin and Ethereum are a way to send money and data in cyberspace using blockchain technology.
- Every bitcoin needs to be “mined.”
- It has a limit: only 21 million bitcoins can ever be mined.
- Because cryptocurrencies are “decentralized,” they are not governed by a central bank or government.
- Most platforms will let you use a credit card to buy bitcoin
Should I Invest in Bitcoin?
Bitcoin is a very volatile asset. If you are ready to accept the risk, ensure you understand what you are investing in and have a strategy for investing in cryptocurrency.
Also, ensure you aren’t investing just because you are afraid of missing out. There are a few questions you should ask yourself before getting involved:
- Do I know what I’m putting my money into and how bitcoin and the cryptocurrency market work?
- Am I happy with how much risk there is?
- How much does it cost now than it did a few months ago? Why do I want to buy something that costs more if that’s the case? I don’t do that anywhere else in my life.
- Are there any signs that prices could go up even more?
- If I buy it now intending to sell it later for even more, who do I think will buy it from me at that higher price, and why?
- Why wasn’t I interested in a great asset when it was much cheaper?
- Have I somehow convinced myself that I know what’s going on?
If you don’t know how to answer these questions, you probably shouldn’t invest. If you decide to buy bitcoin, make sure you’re not putting the money you need at risk.
Things to Consider Before Investing in Bitcoin
As with any investment, there are risks and possible rewards with cryptocurrency. Compared to other ways to invest, cryptocurrency is a very risky choice.
Before you invest, here are some things to think about:
- We don’t think you should put all your money into cryptocurrency markets.
- It’s best to think of gambling, so only invest a small amount of your extra money and be ready to lose it all.
- Never bet more than you can afford to lose.
- If you don’t have much money left over at the end of each month, it’s best to avoid crypto and save it instead.
- Like other assets, cryptocurrency is best as a long-term investment if you want to make the most money.
How to Make Money Through Bitcoin Investing
As with any investment, how much money you make from an asset depends on what price you buy and sell it for. You make money when you sell something for more than you paid for it.
You’ll lose money if you sell something for less than what you paid for it.
For instance, if you had bought bitcoin at the beginning of:
- If you bought in 2020 and sold it on December 31, 2020, you would have made a 300 percent profit.
- If you bought in 2018 and sold it on December 31, 2018, you would have lost 73%.
- Bitcoin’s value is very unstable, so the key is not to sell in a panic and lock in your losses by selling when its value falls.
- All investments work the same way.
Why settle for less?
You deserve better