π₯ Investing in Bitcoin 2021: buy Bitcoin or not?
Should you decide for or against a Bitcoin investment today? Before answering this question for yourself, it is advisable to clarify for yourself which goals you are pursuing. Is it about the secure accumulation of assets, i.e. completely without risk, but also with hardly any return, or are you prepared to take a certain risk, so to speak also to accept the risk of losing money? Is it short term speculation or are you planning a long term investment?
No matter what your personal goals are - a Bitcoin investment in 2020 may well be recommendable. Mainly because the mother of all cryptocurrencies is still a long way from its all-time high from 2017 and the forecasts are that the US dollar hurdle, which Bitcoin failed in December 20.000, will be overcome without any problems. And probably in the foreseeable future.
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How to invest in Bitcoin
If you want to invest your money in the crypto currency Bitcoin, it is necessary to open an account with a provider who then offers the option to buy Bitcoin or, among other things, also offers to bet money on the price development. This can be a broker who offers trading in crypto currencies, or a crypto exchange, through which you can then buy coins. Anyone looking for a suitable provider on the World Wide Web will most likely come across the name eToro. Ultimately, this is one of the best known and best providers that can be recommended if you want to pump your money into Bitcoin.
Open an account with eToro
eToro started as a classic Forex broker years ago, but is now perceived more as a social trading platform. In addition to stocks, ETFs, indices and commodities, it is also possible to work with cryptocurrencies.
The account opening will not be a challenge even for beginners who have never been involved with such a platform. In the course of the registration, some personal data, such as the first and last name, a user name that can be freely chosen, a password and an email address must be given. Registration therefore only takes a few moments.
It is also possible to register via the Facebook or Google account - that is, in this case you log into eToro using the access data of the selected social network.
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SIGN UP NOWDeposit money
In order to invest your money in the Bitcoin, it is necessary to top up the eToro account. In this case, all you have to do is click on the "Deposit money" button. A window then opens - the customer now has to choose the preferred payment method and follow the instructions on the screen. The following deposit methods are available:
- Classic bank transfer
- Credit card
- Giropay
- Skrill
- PayPal
- Neteller
Invest in Bitcoin
Once the deposit has been made, it is then possible to purchase Bitcoin CFDs or "real" coins. To find the Bitcoin, simply enter "Bitcoin" or "BTC" (abbreviation of the crypto currency) in the search mask. Then it still has to be determined how much money you want to invest in the cryptocurrency.
Depending on the course, you will then receive a whole coin, several coins or only parts of a coin for the amount invested; The Bitcoin is then stored in the eToro wallet, i.e. in the provider's digital wallet.
Advantages and disadvantages of a Bitcoin investment
Invest in Bitcoin or not? A question that everyone who has already dealt with cryptocurrency and knows how quickly the price can go up, but also crash, is probably asking.
The advantages are obvious: Bitcoin is a decentralized currency, behind which there is no government or central bank - in addition, the extreme volatility can be seen as a plus, as you can make high profits with small amounts when it comes to the price goes up steeply. In addition, the blockchain, the structure behind the Bitcoin, is tamper-proof.
However, there are also a few downsides: The extreme volatility can also cause a decline, so that high losses are possible - hackers can also empty online wallets. In addition, it is difficult to predict how the Bitcoin price will develop in the foreseeable future. There are promising forecasts, but they should all be treated with caution. In the end there is no guarantee.
What does BTC currently cost?
At the current time (as of the beginning of November 2020) the Bitcoin is 13.800 US dollars (11.800 euros).
Why is Bitcoin always worth it?
If you take into account the fact that the price of Bitcoin is currently just under 14.000 US dollars and the all-time high that was set at the end of 2017 was over 19.600 US dollars, there may still be enough room for improvement. If you also take into account the forecasts, it might be interesting to invest money in Bitcoin. Because some experts are sure that the cryptocurrency can crack the 100.000 US dollar mark - within the next few years. So the question of whether or not to invest in Bitcoin has actually been clarified.
If you look at the price history of Bitcoin, it quickly becomes clear that it has always gone up and down.
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The constant ascents and descents clearly show that the Bitcoin cannot be killed. That means, if things continue like this in the future, you just have to have stamina and strong nerves, because it (apparently) always goes up, no matter how bad the crash was.
Should you invest in Bitcoin right now?
From toys for the nerds to the hearts of speculators - that's how (or something like that) one could describe the development of Bitcoin. And if you take into account the fact that Bitcoin is not yet 15 years old, that's an incredible story.
In addition, more and more Wall Street giants are interested in cryptocurrency. Fidelity Investments, Goldman Sachs, the Stuttgart Stock Exchange or NYSE are firmly convinced that Bitcoin will attract even more attention in the near future. And if you follow the current forecasts of the crypto experts, it would be highly recommended to invest in Bitcoin today - because some analysts and statisticians are convinced that the value of Bitcoin will climb to over 100.000 US dollars.
Changpeng Zhao, the founder and head of Binance, is convinced that the price of Bitcoin will multiply in the near future. Paolo Ardoino, head of Bitfinex, is also convinced that Bitcoin could pass the US $ 2020 hurdle in 20.000. For the coming years Ardoino even expects an increase to 100.000 US dollars.
Marc P. Bernegger, one of the crypto finance investors, is not that optimistic, but he believes that Bitcoin will climb towards $ 55.000. And Tomas Salles, one of the FXStreet crypto analysts, is of the opinion that Bitcoin can soon march towards 80.000 US dollars. Tom Lee, one of the Bitcoin optimists at Fundstrat, on the other hand, is of the opinion that Bitcoin will be just 2022 US dollars by the end of 25.000.
The Winklevoss twins, who became billionaires with their investment in Bitcoin, are convinced that Bitcoin can soar towards US $ 320.000 in the next few years.
Antoni Trenchev, the founder of the Nexo company, is of the opinion that Bitcoin will soon crack the 50.000 US dollar mark.
Invest in Bitcoin or not? If you follow the experts, there is only one answer: Yes - because the price will rise in the foreseeable future. However, all experts agree that the bull market (i.e. the high-altitude flight) will not last forever - a crash, as was also observed in 2018, cannot be averted.
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What types of Bitcoin investments are there?
You can buy coins of the cryptocurrency Bitcoin, but you can also make profits in the course of Bitcoin CFD trading. It is important that you answer the question yourself in advance what you expect from the investment and what risk you want to take.
Buy bitcoin
If you are of the opinion that you want to invest in Bitcoin for the long term, you should buy coins of the digital currency. It should be noted that you do not have to purchase whole coins - you can also buy half a bitcoin or get a piece of the digital currency for the investment amount, the size of which is based on the current price.
The goal when deciding to buy Bitcoin? You buy at a low price and sell at a higher price - the difference is then the profit.
Bitcoin CFDs
If you want to speculate on the price development of Bitcoin but don't own any coins yourself, CFD trading can be recommended. The advantage? You can make a profit not only when the price rises, but also when the price of the digital currency goes down - because here the price development is the focus.
It should be noted that the volatility should of course not be underestimated. Since things can go up and down again and again, particular caution is required - high losses cannot be ruled out if the market does not behave as desired.
Bitcoin ETFs
Bitcoin ETFS were repeatedly requested - but rejected by the responsible financial supervisory authorities. Now there is the first with the Hashdex Nasdaq Crypto Index ETF Bitcoin ETF, which was created in cooperation with NASDAQ. Ultimately, the scenario of investments taking place in Cryptomaps is shown here. If ETFs are recommended in the area of ββstocks, one still has to be careful here because there is no experience of how this index will behave in the foreseeable future.
Bitcoin fund
Bitcoin funds represent another possibility. However, in order to achieve a profitable return, an appropriate tactic should be followed - that is, one is well advised in advance if one deals with the advantages and disadvantages of manual and algorithmic trading. Manual trading is often referred to as a practical approach - because here the fund manager pays attention to a mix that is made up of his experience, know-how and instinct. Digital currencies that have a promising outlook are bought; those with a rather bleak outlook are not even bought or sold again.
In algorithmic trading, on the other hand, guidelines are set which are then implemented as computer algorithms. The software that is used here scores with an automated process so that the guidelines that have been defined in advance are executed when the market data shows corresponding developments in real time. That is, if it is stated that the Bitcoin is to be bought at 11.000 US dollars and sold at 13.000 US dollars, this is exactly what happens when the Bitcoin reaches the respective price level.
Sometimes you can also choose a combination of the two variants - some funds even offer algorithmic and manual trading.
Bitcoin stocks
There are no real Bitcoin stocks, but there are companies that work with the blockchain or invest in Bitcoin themselves. In other words, if interest in the blockchain increases or if the new technology becomes more and more important in some industries, this can of course have positive effects on the Bitcoin price. And increasing interest in the blockchain and rising Bitcoin price can end up pushing the shares of the blockchain and bitcoin company up.
Can profits be made with a Bitcoin investment?
Yes. Of course, there is no guarantee that you can make money with Bitcoin, but it is possible to make a profit with the appropriate strategy. In order to be able to invest in Bitcoin, it is necessary to have a wallet (digital wallet) in which the purchased shares are then stored. However, if you speculate with the price development, you do not own any coins, but ultimately only bet on whether the price will go up or down.
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SIGN UP NOWBitcoin as an object of speculation
Bitcoin is a digital currency, but it is also often seen as an object of speculation. This is primarily due to the high volatility. Ultimately, the Bitcoin price in mid-2016 was still around 500 US dollars - today (early November 2020) a Bitcoin costs around 13.800 US dollars. At the end of 2017, when Bitcoin hit its all-time high, it was $ 19.600.
Buy cheap coins and then sell them at the highest prices - and the difference is then the profit. Ultimately, this is exactly the main reason for many crypto fans why they invest in crypto currency at all.
Whereby you don't necessarily need cryptocurrency coins for a Bitcoin investment. You can also speculate on the price development.
Bitcoin as a means of payment
The Bitcoin can of course also be used as a means of payment. More and more providers are accepting the cryptocurrency. Ultimately, you save fees and, above all, time. Because the Bitcoin transactions generate hardly any costs and can be transferred from one wallet to another within a few moments.
There is no government or central bank behind Bitcoin. That means it is a decentralized currency.
Conclusion: The best time to invest in Bitcoin was 5 years ago or now!
Anyone who invested in Bitcoin five years ago, i.e. at the end of 2015, only had to pay between 250 US dollars to 400 US dollars (around 200 euros to 350 euros) for a coin. Today the Bitcoin is just under 14.000 US dollars. So is the best time over? No.
Anyone who looks at the current forecasts knows that things can definitely go up - and probably will. There are a few reasons that speak for a soaring, which could then shoot Bitcoin to new heights. It is therefore advisable to open an account with eToro now and to decide on a Bitcoin investment. Because who knows? In five years, if the experts are correct, Bitcoin could be as high as 100.000 US dollars.
Frequently asked questions about investing in Bitcoin
How dangerous is a Bitcoin investment?
If you speculate with a rising Bitcoin price, you have to be aware that there are no guarantees - no matter how promising the forecasts are. For this reason, it is important to only invest freely available capital, as there is a risk that should not be underestimated.
Is Bitcoin a currency in crisis?
Bitcoin is called a currency in crisis, but it had to accept an enormous loss when the coronavirus turned the world upside down in March - at that time it went from almost 10.000 US dollars to 5.000 US dollars. However, recovery followed a little later.
Are there taxes to be paid on the profits?
The profit from coins that were bought more than a year ago is tax-free. The holding period to achieve a tax-free profit is one year.
Should you only invest in Bitcoin?
Bitcoin has an enormous impact on the entire crypto market. If the price of Bitcoin rises, the prices of the other crypto currencies usually rise - so also when it goes down. But that doesn't mean that you should only invest in Bitcoin. You can very well pump your money into other digital currencies.