Bitcoin started out as a peer-to-peer digital currency network, but over the years, speculation and demand have helped to drive prices upwards and led to many seeing the currency as a viable investment.
Early investors have seen massive returns of more than 1000% in ten years. While it’s unlikely that you’d get the same returns in the future if you invest now, that shouldn’t stop you from investing if you think its value can increase.
While the Bitcoin price has increased a lot over the years, it’s also experienced significant drops in value due to market volatility and a lack of confidence from investors.
Before investing any money, there’s a lot you should know about cryptocurrency and how it works. In this article, we’ll talk about some common concerns and questions from beginner crypto investors.
Bitcoin Price Predictions
The value of Bitcoin has grown a massive amount over the years, with a single coin now being too expensive for most people to purchase.
However, it’s still possible to buy fractions of the coin, so there’s no barrier to entry provided you can open an account on an exchange.
Although Bitcoin’s price has risen, it’s also experienced many market crashes, and there’s no way to predict what the future will hold for this digital asset.
Unlike other investments, such as shares, it’s not tied to the success of a company. In addition, it’s not like a regular fiat currency that’s backed by a government and gold reserves. The price is purely based on speculation and due to the fact that supply is limited.
Many people have made predictions of what they think Bitcoin’s price will be in one, five or ten years’ time.
Ultimately, these predictions are guesswork, and no one could have predicted the current price unless they got lucky.
However, you can make predictions about whether the price will go up or down based on current market sentiment, the economy and regulations.
Can You Lose Money Investing in Bitcoin?
Although many people have made money from investing in Bitcoin, it’s also possible to lose money if you’re not careful or you’re unlucky.
The most common way people lose money is by purchasing coins and then selling them when the price drops and they panic.
If you want to invest and make money from your investment, you have to be willing to hold during dips. As a result, you should only ever invest what you’re willing to lose.
If you panic over your investment losing value, you’ll be more likely to sell when you should be holding.
It’s also important to follow proper security protocols to avoid losing your coins to hacks, dodgy exchanges or incorrect transactions.
Unlike using a bank, you won’t get your money back if you fall victim to a scam or send your coins to the wrong person.
Bitcoin Security Tips
- Store your coins in an offline wallet – Many people keep their Bitcoin on an exchange, but if the company behind the exchange goes bankrupt, you could lose all your coins. Set up an offline wallet and move your coins there for safekeeping.
- Protect your private key – Your wallet will have a private key, which only you should know. If anyone else has access to this key, they’ll also be able to access your coins. Treat it like a safe combination code, and make sure no one else can get it.
- Double-check addresses – If you’re sending Bitcoin to an exchange, a personal wallet or making an online transaction, you need to copy the right address. Sending to the wrong address could mean you lose your coins forever.
- Make sure your exchange account is protected – You’ll need to open an exchange account in order to buy and sell cryptocurrency. Make sure your account is properly secured with a strong password and two-factor authentication.
- Use secure internet – When making crypto transactions, you’ll need to be connected to the internet. Make sure your connection is secure, as using public WiFi can open you up to potential cyber-attacks and other threats.
- Be wary of scams – Phishing scams are very common in the world of crypto, so you should always be wary of links sent to you and investment opportunities that sound too good to be true.
Making the Most of Bitcoin Investing
Provided you follow the advice on this page, you should be able to invest in Bitcoin safely and without issues.
Of course, there’s no guarantee that you’ll make money from your investment, as the market can be highly volatile.
However, keeping track of the price of Bitcoin is easy, and holding long term has the best potential for results.