Key Points On Bitcoin Investment

Key Points On Bitcoin Investment

Key Points On Bitcoin Investment

If the idea of investing in cryptocurrency didn’t excite you before 2017, there’s a good chance it caught your attention last year. Bitcoin, in particular, had a sensational year, starting right around $1,000 in early January and skyrocketing to nearly $20,000 toward the end of the year. It would be easy to look at the cryptocurrency market and groan at the idea of having missed the train; then again, plenty of people are even now looking to hop aboard in the hopes that these bizarre digital currency alternatives just keep climbing.

I can’t tell you whether or not that’s a good idea. Frankly, no one can. Bitcoin and its fellow digital currencies are operating in uncharted territory, and while people can draw comparisons to the currency trade or to other valuable commodities, there’s not really any exact parallel that informs us as to where bitcoin will go from here. What I can do, however, is lay out some of the key points that should go into any decision or analysis of this kind of investment.

The 2017 Surge Is Over

The 2017 surge in bitcoin was quite something to behold, even if you aren’t really interested in investment patterns, cryptocurrency, or finance. It just isn’t the sort of thing that happens very often, and those who played it correctly were surely able to make a lot of money. However, it’s important not to get caught up now in what happened a few months ago. In late January bitcoin slipped below $11,000 with all major cryptocurrencies feeling the pressure. While it may yet start climbing again as it did before, this proves beyond doubt that bitcoin is volatile if nothing else.

The Spectrum Of Predictions Is Wide

Without touching on any specific advice from high profile people in the cryptocurrency and financial investment worlds, it’s important to point out that the spectrum of predictions for 2018 and beyond has been wide. Some would have you believe bitcoin is about to crash to the point that it’s essentially worthless; others see 2017 as nothing but a tease for far greater climbs to come. Seeking advice on this sort of thing is important, but be careful not to buy into the most outlandish predictions you see in either direction just yet, because there is bound to be a credible expert making the exact opposite prediction.

The Wallet You Choose Is Important

For those who haven’t bought bitcoin before, the idea of a wallet might seem like a secondary concern. In fact, it’s an extremely important aspect of the process. Bitcoin wallets store the digital keys you use to access your store of bitcoin online (because there’s no such thing as actually possessing physical bitcoins). It helps to think of them as bank accounts or investment portfolios full of cryptocurrency. These wallets come in five forms, and analyzing those forms (desktop, mobile, web, hardware, and paper) is as important as analyzing when to buy and sell. The different types of wallets offer different security perks, different levels of convenience and ease of use, and in some cases different fees for transactions.

Regulatory News Matters

People who are looking into investments like to research the different things that might influence what happens to those investments. It’s the only appropriate way to approach things, but it’s particularly tricky where bitcoin is concerned. Because cryptocurrency is new and to some degree experimental – not to mention fully digital and fully decentralized – it would almost seem to be free from influence. What we’re learning more and more, however, is that regulatory news matters. Bitcoin is for the most part not regulated around the world, but when news breaks of a major economy (such as Japan, recently) trying to restrict bitcoin in any way, prices can drop. It’s just something to keep in mind.

Bitcoin Has No Comparison

People seem to be very eager to compare bitcoin to other lucrative commodities from the past – most typically oil and gold. However, comparisons like these tend to be simplistic and ignore the reality that bitcoin is unlike anything we’ve ever seen before. As The Telegraph put it bluntly, bitcoin is not the new gold despite its “glittering” run to close out 2017. Oil has a practical use, and gold is a tangible resource that has literally been used to back currency. Bitcoin, by contrast, is entirely made up, with its value backed by little more than its own potential. It’s a brand new concept, and one without a comparison – for better or worse.

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