On March 13, 2021, the value of the flagship cryptocurrency, Bitcoin, reached an all-time high of $61,701.
Some analysts believe that Bitcoin is the best investment opportunity of our generation. As companies such as Overstock.com, AT&T, and Microsoft begin to accept it as payment, it’s becoming even more widely adopted.
If the value of the currency continues to grow, experts predict that it could be worth $100,000 by the end of 2021.
Wondering whether you should invest in Bitcoin right now? Keep reading to learn more.
What Is Bitcoin?
The concept is Bitcoin isn’t very complicated. It’s a cryptocurrency, which uses blockchain technology to transfer funds from one bank account to another.
However, unlike regular currencies, cryptocurrencies are decentralized, meaning they’re not regulated by a financial authority such as central banks or the government.
Because cryptocurrencies are global, they’re worth the same worldwide. They’re easier to transfer across the world without worrying about the concept of exchange rates.
How to Buy and Trade Bitcoin
If you’re considering buying Bitcoin, it’s generally safe. As with any investing or trading, you must be aware of the risks to determine whether it’s right for you.
To buy, sell, and hold Bitcoin, you can sign up for a cryptocurrency exchange.
There are many types of exchanges. Because Bitcoin is decentralized, some exchanges allow users to buy and trade anonymously, and there is no point of control. There is no central group responsible for policing potential illegal activity.
If you prefer, you can also directly and negotiate and trade Bitcoin directly with brokers over-the-counter (OTC). This page discusses the process of purchasing Bitcoin OTC.
Set Up a Payment Option
Once you select an exchange, it’s time to gather your personal documents. While the information needed varies by exchange, typically, you will be asked to provide your social security number, a picture of your driver’s license, and information regarding your source of funds.
The process of setting up an exchange payment option is essentially the same as setting up a brokerage account.
After the exchange confirms your identity and ability to trade currency, you can connect a payment option. Most exchanges allow you to connect directly to your bank unless you’d instead use a debit or credit card. It’s possible to purchase Bitcoin with a credit card, but financial experts don’t recommend it, as cryptocurrencies can be especially volatile.
Place an Order
When you’ve confirmed a payment option, you can begin to buy Bitcoin, as well as other cryptocurrencies.
Once you’ve purchased Bitcoin, you’ll need a place to store your new digital assets. You’ll likely want to use a cryptocurrency wallet to ensure you have control over your funds rather than keeping them in the exchange.
If the exchange you use happens to be hacked, you can lose your currency unless you withdraw it and keep it in a personal account.
Time to Invest in Bitcoin
If you’ve been wondering whether to invest in Bitcoin or Ethereum and other cryptocurrencies, it’s time to take the plunge. Get into the trade early before you miss the chance.
Continue to browse our archives for more financial planning and investing tips if you’re still looking for guidance.