|By Nathan Young|
December 7, 2017
Bitcoin has surged in popularity and is a headline nearly every day. Surging in price, many wonder if they should purchase Bitcoin themselves. In the investment world, if you’ve missed the train it’s best to wait for the next one. However, if you still find yourself wanting to add some Bitcoin to your portfolio, here are a few points you should familiarize yourself with.
Bitcoin and What You Should Know Before Investing In This Unpredictable Market
First, you should understand the technology behind Bitcoin. The blockchain is a public ledger that allows transactions to be posted in order as well as publicly posted. Transactions are encrypted so you are unable to see whom they belong too, maintaining a level of privacy.
The blockchain is essentially unhackable because of how many people are processing the transactions to the blockchain. Also, they way it is structured would make it extremely difficult for anyone to take control of the blockchain. Understanding this technology will be useful as it is becoming more mainstream.
Now that you have a brief understanding of the blockchain, understanding how to invest is next. Currently there various exchanges you purchase Bitcoin, with one of the most popular being Coinbase. Buying and selling is all you can do, compared to short selling and option trading with other securities.
Soon, traders and investors can utilize future contracts through the CME. Recenlty approved, this will give traders and investors the ability to buy the market as well as go short the market. However, these are derivatives and will be derived from the underlying Bitcoin price sources. This is a big in step in adding legitimacy to the cryptocurrency.
The point of Bitcoin is to use it as a way of transacting. Sending money between two people without a middleman. As the cryptocurrency evolves, people are using it as a store of value more than a purchasing tool. When you weigh the pros and cons of Bitcoin, keep in mind it is gaining in popularity as a spending vehicle.
Beyond that, many are using it as a store of value and trading vehicle. When you invest, keep in mind what your primary goals are. As it increases in popularity, Bitcoin will become widely accepted and uses will grow.
There are many different types of cryptocurrencies beside Bitcoin, but be aware of issues such as liquidity and dependability. This new wave of finance that will change the way we transact. It is only the beginning with many years of growth to go.