Bitcoin was intended to grow into a global currency as a substitute for the traditional currencies issued by governments, i.e., fiat currency. As bitcoin is a new type of money, some use it as a form for merchant transactions and for some proved to be a highly valuable asset, but it is still highly volatile in nature.
Bitcoin, at present, is the talk of the town. It is not clear to the people who are new to the world of cryptocurrency how they can invest in it to get a good return on investment. Because most banks and other mainstream brokerage platforms all around the globe are denying to handle it, besides, the price swings of the market can be alarmingly volatile according to the standards of the traditional market of stocks and bonds.
Investment in cryptocurrencies is all about a risk appetite of a person. If you are all out for it, here are a few ways to invest in bitcoin.
Buying and Selling a Bitcoin via platforms:
One method for bitcoin investment is by buying and selling either a full coin or a part of it via any trading app available in the market. In order to buy bitcoin in dubai through apps, you will register yourself first by providing personal information. After that, you will deposit some money (a minimum amount to open an account), which you can later use to buy bitcoin. At these platforms, you can get statistics like ETF or stock and check the performance of how bitcoin is doing in the market. You might be wondering where the bitcoins are stored when you buy them? Well, the platform normally provides wallets, sometimes for free or sometimes via purchase. If you buy bitcoin, you will be able to store it in your wallet for future use.
Face-to-Face purchases or any kind of transaction can be made. It is a method to invest in Bitcoin, which is direct, rewarding, and with no fees. This kind of investment should be done with the people you know, i.e., transact with family or friends instead of any alien for safe trading. From the time bitcoin is trending, there are also many meetups for Bitcoin trading where enthusiasts of cryptocurrencies connect with each other and trade in an environment free from middle men’s involvement.
HODLing is a long-term investment of Bitcoin. It is an acronym of Hold On for Dear Life. Fundamentally, bitcoin investment is all about taking advantage of the highly volatile environment of Bitcoin. This technique requires a lot of knowledge with practice. Therefore, do your homework before you invest via this method. A few styles of this kind of trading include Day Trading, Swiss Trading and Arbitrage.
Mining is also one way to invest in bitcoin. It is the method by which miners use computers (have to be powerful) to solve complex mathematical puzzles. You can set up a farm for mining to get into the pool (a collaborative group of miners). When miners crack the code of the puzzle, they are rewarded but remember not all of them are rewarded because the code of bitcoins is designed in a way that at one time, only one machine is rewarded. So if you want to win good rewards, you need to set up a mining area farm with not less than ten computers.
Trusts and Funds:
If you are not interested in holding the bitcoins themselves, you can invest in trust funds of bitcoin where they are held on shared phenomena just like mutual funds. These kinds of platforms offer a portfolio that will hold or trade the bitcoins for you.
One way to do that is by using GBTC (Grayscale Bitcoin Trust) because it trades through traditional markets. GBTC is the largest platform, but this is not the only platform of trusts and funds. Others include ETC,3iQ, CoinShares, Wisdom Tree etc. However, these funds have high fees; for instance, GBTC charges 2% annually to trade at a premium.
A broker is a middle man who would help you invest properly. They will assist you in a mechanism of setting value and storing them. Brokers will get bitcoin from miners and manufacturers. Brokers of bitcoins are the only options that will let you purchase a huge amount of Bitcoins at one time without entering the market, shifting the price.