By now, we all know the radical history of Bitcoin, which emerged in 2008 in the middle of that year’s big economic crisis.
Bitcoin pioneers wanted to eliminate the banks’ power, cut fees, and make transactions more transparent, building a decentralized system where individuals have full control of their money.
Bitcoin is a digital currency – or better, an exchange of digital information that allows you to buy or sell goods, through a secure transaction that runs on a peer-to-peer computer network, thanks to the blockchain technology, which allows bitcoin to be decentralized, transparent, and immutable.
It’s clear, therefore, that the current Covid-19 crisis has created another economic situation that is truly benefiting from blockchain: the pandemic, indeed, gave a boost to digital transformation in many business areas, especially through blockchain and distributed ledger technology.
That’s why Bitcoin has already become one of the most attractive investment assets of 2021.
As mentioned above, Bitcoin is the first-ever decentralized global digital currency, as it:
Even if Bitcoins’ daily use isn’t still as common as FIAT, in 2021 more and more businesses are going to adopt it as a powerful payment method, as it can be easily linked up with your debit cards in a click.
In fact, as we’re going to see in the next section of this article, setting up your wallet and starting buying/selling products – or investing your money – is simpler than it seems.
Bitcoin is one of the most liquid investment assets ever, thanks to:
Therefore, its high liquidity makes Bitcoin be one of the best investments of this new year, when it comes to both short-term and long-term profits.
On top of that, cryptocurrencies trading is a relatively new practice for investors: so, as it offers unpredictable swings in terms of price and volatility, there will be always new opportunities for productive investments, above all in 2021.
In fact, Bitcoin’s price has already increased massively in 2020, mainly due to:
Bitcoin offers also a truly intuitive and simple trading process, where you don’t need to hold any traditional stock trading certificate or license, nor you have to rely on a broker to trade a company’s shares.
Conversely, Bitcoin trading just consists of:
Not being regulated by governments, Bitcoin is immune to inflation, and you won’t need to worry about your cryptos losing value.
It turns into unrivalled returns, as – in recent years – Bitcoin has outperformed every financial marketplace: for instance, the S&P 500 Index has improved from 2,090 to 3,629 points, growing by 73%.
First and foremost, you should know that there are two main ways to invest in Bitcoin:
Yet, the easiest and most cost-effective way to invest in Bitcoin is through an online regulated broker, by simply opening an account and making a deposit with a debit/credit card, e-wallet, or bank transfer.
Then, it’s worth talking about the two main types of bitcoin wallets, namely:
As any other kind of investment, you should also ask yourself why you want to do it: for instance, to make a quick profit, or to gain long-term returns.
In any case, you should always set some straightforward, SMART, and realistic financial goals before investing.
Another great step is to decide how much you’d afford to lose, and invest accordingly: this is a wise piece of advice that works for any investment, and Bitcoin is no exception.
Therefore, your business holdings can both increase or decrease in the short-term, so don't invest any more funds that you might afford to lose.
Another pivotal point to think about is taxes: in the United States, for example, Bitcoin is taxable.
Hence, pay attention to your country’s regulations, and – if needed – keep record of all your transactions and interactions with cryptocurrencies.
We’ve just seen all the benefits and simple steps to invest in Bitcoin.
Yet, it is not an all-rounder, since there are also some risks you should be aware of before investing in it, such as the fact that:
Last but not least, calling back to risks, you should always protect your company’s assets in the blockchain decentralized environment.
The first rule is that only you must own your own private key: in fact, even if the rate of custodial applications is growing, the so-called ‘custodial wallets’ are not just a convenient way to store your coins, but also a big risk in case of a hacker attack, as it would be impossible to recover your funds.
Therefore, to be sure your digital assets are protected, opt for:
As we’ve seen today, Bitcoin and cryptocurrencies are becoming one of the most valuable investing assets in 2021.
Therefore, just be sure you set your main business goals, plan each aspect of your investment, and understand how to protect it in the long-term, by relying also on a serious partner for your blockchain projects.
Reach us out to learn more about ICON’s blockchain wallet applications’ expertise and discover all our software development services!
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