Trading of cryptocurrency is one of the emerging trends in the world of computing that has attracted attention of most online entrepreneurs and trading companies.
Cryptocurrency rides on cryptography which is an encryption technology that cannot be decoded by human meaning and its value cannot be changed, unlike other currencies.
Apart from the encryption, the technology relies on Blockchain technology, which is a technology that allows information stored in a digital format to be distributed without copying.
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As information about cryptocurrency continues to be made accessible to people, the number of people investing in the digital currency has witnessed a tremendous growth.
One of the most popular types of cryptocurrencies is bitcoin. Today the value of bitcoin is estimated to be around $90 billion and the value is expected to grow in the near future.
Looking back, by the time bitcoin was being established in 2010, the value of its was estimated to be around $0.03. However, in the following subsequent years, the value of Bitcoin continued to appreciate and by December 2011, one bitcoin was equal to $50. 2017 is the year that has seen bitcoin value appreciates firmly.
In January 2017, the one bitcoin was equivalent to $1150, and by November 2017 the value of bitcoin is around $10000.
However, despite the above trend, the journey of investing in bitcoins has not been a roller coaster ride for most entrepreneurs. Consequently, when investing in cryptocurrency lots of caution needs to be taken as a result of the constant market variations which affects the cost of bitcoin. Below are a number of things you need to know before investing in bitcoin 2017.
What does it mean to invest in bitcoin in 2017?
Generally, there two ways that one can invest in bitcoin. The first one you can buy Bitcoin and later and wait for its value to appreciate then use it to buy something or exchange it with money. Another way of investing in bitcoin is by investing in a company that deals with bitcoin. If you are buying bitcoin with the hope that its value will rise, the most important thing is to determine which the best time to buy is and the best time to release.
The bitcoin value has appreciated and depreciated over the last 5 years and is thus important to consider the market trends when buying. If you want to buy bitcoins for holding, it is essential to put into consideration the following factors.
When investing in bitcoin, do not invest more than you are willing or have the ability to lose. For example, today the value of bitcoin is around $10000.
If you take a loan from a financial institution to buy the product, you will find it hard to repay the loan if the value goes down by half, which is highly possible putting into consideration the past fluctuations in the price of bitcoin. Most people have termed bitcoin as a risky investment, but the higher the risk the higher the possibility of huge returns.
After buying bitcoin (you can use coinbase.com to do this), you should carry them in your own personal wallet as opposed to leaving them at the exchange.
If you can afford a hardware wallet (like Trezor or Ledger), that is the best place for storing your bitcoins. Though no one has ever lost bitcoins at the exchange, so many people are working on ways to bring the technology down and if one day they succeed those who have their currency in the exchange might encounter some losses.
When trading in bitcoin, the best option to use the dollar cost averaging. This type of trade implies that you do not have to buy all the amount of bitcoin you want in one trading. Instead, you can be buying a fixed amount every week, month or year according to your preference. It’s also important to note that bitcoins are not controlled by anyone, but guarantees that the money that one is receiving from a sender is genuine even if you do not trust the vendor.
Factors affecting bitcoin value 2017
The value of bitcoin has hit its highest in November 2017, and experts suggest that its value might even go higher comes 2018. However, when investing in bitcoins, it’s important to understand some of the factors affecting bitcoin value in 2017.
One of the factors that have resulted in the increased value of bitcoin in 2017 is its publicity. As more and more people continue to learn about bitcoins, the demand for this form of currency has exceeded the supply resulting in the current value surge.
Another factor that has resulted in the increase in the value of bitcoin is the increased acceptance of the digital currency by most financial institutions. These have resulted in most people gaining trust in this currency resulting in its value charge. Other factors include world economy, governments’ regulations and technology advancement.
With the bitcoin review, one can be able to make a sound decision when choosing whether to invest in bitcoin or other cryptocurrencies.