Treating bitcoin as an investment



When bitcoin first emerged, it did so as a digital currency.

Supporters of the new venture were convinced that it would supplant fiat currency and become the new normal, used in day-to-day transactions and as a storage of wealth simultaneously.

Even now, bitcoin is commonly defined as a “digital currency,” and there are opportunities for people to spend it. In fact, there are more of these opportunities with each passing month, as new merchants begin to accept bitcoin.

Despite all this, the idea that it is a vehicle for investment has taken hold in the past 18 months or so. Some have started to call bitcoin the new gold, some have compared it to oil, and others have merely stressed that it is a commodity (without making outlandish comparisons to other valuable commodities, that is).

This doesn’t mean anything in practice, as people trading bitcoin can still do whatever they’d like with it: store it, trade it, send it, etc. However, the idea of investing in the crypto is becoming a lot more popular than that of using it as everyday currency.

This means a few different things for prospective users.

Measuring Expectations – When you’re going about making a new investment, you’ll almost inevitably come across expert opinions and analyses about where things are headed. With it lately, there’s almost no middle ground in these predictions. You’ll find respected investors saying bitcoin is the very picture of a bubble that’s about to burst. You’ll also find successful investors claiming it’s heading for $100,000 this very year. It’s important to recognize that bitcoin is fundamentally difficult to predict, and while listening to experts is valuable, you should measure expectations.

Analyzing Wallet Options – Using bitcoin as currency means opting for a means of storing and spending it that offers you convenience similar to (or better than) that of cash or card payments. However, if your plan is to invest over time, you’ll want to look into your wallet options and focus more on security than efficiency. Ideally you’ll find a wallet that offers both, but if you’re putting a significant amount of money into cryptocurrency and storing it, security should be the top concern.

Considering Altcoins – As you may know, a huge range of bitcoin competitors have come to fruition in the last number of years, and some have become worthy investment assets themselves. Speaking very generally, the top “altcoins” (such as litecoin, bitcoin cash, and ether) move in similar patterns to bitcoin, and cost far less to invest in. This, if you’re considering investing in it, you may at least want to read up on altcoins as well.

Paying Regular Attention – This should go without saying, but because many are still just getting used to the idea that bitcoin is an asset, it needs to be mentioned. It is very volatile, which means you shouldn’t necessarily react to sudden shifts. If you do, you’ll be doing so several times a day as often as not. However, you do need to pay regular attention to the movements in price and the factors influencing them, as you would with any other form of investment.

Source Article from http://www.hangthebankers.com/treating-bitcoin-as-an-investment/

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