How to invest in Bitcoins
The value of Bitcoin has been on an upward trend ever since it was first launched in 2008, with only a few minor dips. Over recent months, its value has hit record highs, having spiked to almost $3000 a coin in early May 2017. This has generated quite some interest in the open source virtual currency, with many investors pondering on whether they should invest in the digital currency. One of the easiest ways of investing in Bitcoin is buying the coins themselves and counting on their continued upward trend.
Why are Bitcoins so valuable? Well, Bitcoins are valuable because they are both useful and scarce. For a minute, let’s compare them to gold. Gold occurs on the earth in limited amounts. As more and more gold is mined from the earth, less and less gold remains, which is increasingly harder and more expensive to find and mine. The same holds true for Bitcoin. Bitcoin has an inbuilt limit of 21 million coins. As more and more coins get into circulation, mining for more coins becomes harder and harder. This explains why the value of Bitcoin will most likely keep rising. However, for those who feel hesitant, there are other ways of investing in the cryptocurrency and the technology behind it.
One way of investing and profiting from Bitcoin is to invest in companies that have investments in Bitcoin and the blockchain technology. This does not mean investing in companies who have no other business besides investing in Bitcoin. Such companies can be extremely hard to evaluate and might be a great way of losing your money. What I’m talking about is investing in companies that invest in Bitcoin with the option of conceivably adopting the technology as part of their core business. A good example is Goldman Sachs invests not only in Bitcoin but in other technologies within the financial sector.
Another great way of potentially reaping profits from the rising popularity of the cryptocurrency is to invest in retailers that accept Bitcoin payments. As Bitcoin gets more and more popular, retailers that accept Bitcoin may have a bright future ahead of them. All the same, much of the retail sector has not been doing very well, therefore it is important to do due diligence before placing your money on any company.
Another option of investing in Bitcoin is the Bitcoin Investment Trust, which was created with the aim of bringing investors together to pool funds and buy Bitcoins in much the same way as they would do with normal stocks, instead of creating separate accounts with a Bitcoin exchange and buying the coins individually.