4 Things to Know About Investing in Bitcoin

Bitcoin has been popular since it was launched in 2009. Enthusiasts like it because the currency isn’t under the bank’s control and there are no transfer fees. While bitcoin has had a positive reception from a certain part of the online community, others have been lukewarm. Bitcoin and other forms of cryptocurrency are here to stay, but investors should learn a few things before they commit.

Bitcoin is Somewhat Volatile

If someone had $100 in bitcoin back in November 2012, they would have had approximately 1100 coins. By the end of November of the next year, that same amount of bitcoins would have been worth over $1.35 million. Holding onto them for another six months would have meant the value diminished by half. Bitcoin is rather volatile as news, forks, hacks, and exchange collapses all raise or lower the price. However, these fluctuations aren’t as big as many investors believe them to be.

Bitcoin Trading Comes With Costs

Just because bitcoin isn’t controlled by any one country or bank, there are still fees to consider. Each transaction comes with a tip for the bitcoin miners. The bigger the tip, the faster the transaction is processed. When exchanges are used to make withdrawals and deposits, there are fees to pay as well. In some cases, they can be as high as 3.5%. For a currency that’s supposed to be free, there are many expenses to consider.

Bitcoin Can Be Traced

Because bitcoin isn’t linked to a local bank account, the government can’t request the owner’s information. However, the blockchain records every transaction, and anyone can see it. While bitcoin is commonly used on the black market, it’s cleaner and more transparent than many people think.

It’s Possible to Invest in Bitcoin Futures

Currency traders have various tools that allow them to make huge investments and get sizable returns. Traders can purchase futures, trade derivatives, and use leverage. While it’s risky, it enables them to make large amounts of money for themselves and their clients.

Now that bitcoin has been around for a few years, many platforms are offering brokerage and trading services for the currency. Many of these sites aren’t well suited to beginners, but they offer new investors something to work toward. Visit the website to get more helpful hints on bitcoin trading.