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All these ads are repeatedly slammed into my face with these screaming captions. So, it got me wondering what are some of the ways that you could invest in crypto… But the question remains should you invest in bitcoin? If yes, then how? Find out which one suits you best so you know surprises you might face on your way.
Buy and Hold
To start out with the easiest one; Buy and Hold. These people believe in the long-term prosperity of the bitcoin and hold it till the value increases. They aren’t bothered by the volatile nature of the currency. They think that volatility is a little more than a blip on a long journey, like a small hiccup.
Some investors want immediate returns. They are impatient beings like me and like to live in the moment. The happening nature of anything is what keeps them up on their feet. There are several ways to get a quicker return on your investment; it includes relying on the cryptocurrency volatility for a high rate of return if they market seems favorable to you.
This is a slightly confusing concept but doesn’t worry Bob the Breaker, is going to break it down for you in simpler terms.
So what happens is that some people want to bet on Bitcoin’s value when it is going down. Short selling means that you borrow an asset at a certain price and then you can sell it to someone else at the same price. And if the value goes down, you can buy it back. So, for e.g., I borrowed an asset for $100 and then the price went down, I bought it for its new price which is $50 now. Hence, you made a profit on the difference between the original and the price of the borrowed asset.
The way you can go about this on bitcoin is thought using Bitfinex. It finds lenders who are willing to give you bitcoin for a certain period. Although, the danger of the market going against you still remains, thus it does not make it trickier but riskier as well.
It is important to bear in mind that bitcoin is volatile, it a relatively young asset and people only started taking it seriously by the end of 2014, for a reason.
It lacks liquidity and much of the market value depends on the giants of bitcoin world who can move the price relatively easily by the trading large amounts in a short period of time. All of this makes the market a dangerous place. The irrationality of the marketplace is harder to understand.
This doesn’t mean you don’t call the shots!
But it is important to remember what you’re doing and you shouldn’t give in more than you can afford to lose because, at the end of the day, you got you.