Seven Important Things To Know Before You Buy Bitcoin
Have you been thinking about making an investment in cryptocurrency?
There are a number of important things that you need to consider when you decide to make an investment in Bitcoin. It is important that you first do your research about cryptocurrency before you decide to put your money into it. Bitcoin may have made quite a few waves in the past decade, but it’s important that you don’t think of it as an investment vehicle. There are plenty of things to keep in mind before you decide to buy Bitcoin. Here are seven important things to know.
1. Do Your Research
Have you looked at the past trends of how Bitcoin has evolved? You have to understand that research is critical before you decide to purchase Bitcoin. At the end of the day, it’s a cryptocurrency, so the first thing that you need to do is research its prospects and how cryptocurrencies have evolved over the past few years. It’s imperative that you do your research about the different cryptocurrencies that are in circulation, check the whitepaper, and then decide whether to put your money into it or not.
2. Find a Suitable Exchange
Cryptocurrency such as Bitcoin is generally available from a number of different crypto exchanges. It is important for you to find a reputable and reliable crypto exchange from where you can buy the coin. Ideally, when it comes to investing in crypto, there are plenty of different exchanges from where you can buy it. When you are able to exchange your fiat currency with crypto, you have to make sure that you get a good rate too.
3. How Much Do You Want to Invest?
Another important thing that you need to consider is the maximum amount that you are willing to put in. You have to be very particular about the maximum amount of money that you decide to put in because there is a big chance that the values are likely to plummet in the future. It is important for you to make sure that you decide how much money to put into crypto. You need to understand that Bitcoin is obviously not as liquid as other currencies, so it’s going to be difficult for you to use Bitcoin freely.
4. Bitcoin Is Decentralised
One very important thing that you should know before you buy Bitcoin is that it is a decentralised currency. One of the biggest advantages that you get for buying this currency is that it can’t be seized by a central authority. They can’t be devalued either. The con of decentralisation is that there is no backing for the government, so the currency is actually quite volatile and liable to fluctuate in the future.
5. You Will Have Limited Options
If you own Bitcoin and are looking to invest your money into different things, you should know that the number of options available to you will be limited. Most government organisations have repeatedly denied applications for funds that are operated using Bitcoin, and you won’t have many decent options available for investment. So, if you were thinking of putting your money into Bitcoin simply because you want to invest it in other places, this might not be such a good idea.
6. It's Very Volatile
Volatility is not something that you would want when it comes to making a long-term investment. One of the main reasons why so many people tend to steer clear of Bitcoin and other cryptocurrencies is simply because they tend to fluctuate and move around in value quite a bit. For instance, Bitcoin has been around since 2008, but it wasn’t until 2017 when the currency really rose in value.
By the end of 2017, one Bitcoin was retailing around the $20,000 mark. Many Bitcoin millionaires rose to the fore because of that, and it wasn’t long before people realised that there was quite a lot of money to be made. But then, the value of Bitcoin crashed rapidly, and it even went down all the way to $4,000 within a couple of years. As you can understand, this indicates major volatility, and it just means that you will have to be very particular about where you put your money.
7. Deals Are Anonymous
You can easily buy Bitcoin online and transfer it to a crypto wallet with minimal hassle. Furthermore, you should know that the deals you make on crypto are simply traceable through a TRX ID and nothing else. No one will know who sent the money, and no one will know who received it. That is one of the main reasons why you have to be so particular about where you put your Bitcoin. It’s important that you choose a safe wallet.