7 expert bitcoin investment strategy to increase your profits

What is Bitcoin

Bitcoin is a digital currency that is not tied to any country’s central bank or government. It uses peer-to-peer technology to operate with no central authority manipulations.
Bitcoin supply is autonomous through computer networks backed by powerful
blockchain algorithms which accurately confirm every transaction being made on the blockchain network.Blockchain is at the heart of any bitcoin investment strategy.

Bitcoin can be used to buy goods and services, trade for other currencies, or be saved. Bitcoin has been in circulation since 2010 and has grown in value during this time. Anyone can invest in bitcoin by buying bitcoin directly from another person, through a bitcoin exchange platform or by buying shares of an exchange-traded fund like Grayscale Bitcoin Trust (GBT).

Bitcoin is the first decentralized digital currency, which was designed by an unknown person or believed to be a group of people under the name Satoshi Nakamoto-SN. Bitcoin’s introduction was around late 2008 just after the global economic meltdown which had affected the economies of all countries badly. As a result of this economic meltdown, people started questioning the effectiveness of conventional money and the role of Government in money circulation. Bitcoin promoters seized the moment and started popularizing crypto as the best alternative to solve such problems.

first major Bitcoin transaction

Bitcoin has since grown to be one of the most popular cryptocurrencies on the market with a current value of over $20,000 per coin. The first major Bitcoin buy was completed in 2011 when a Florida software developer named Laszlo Hanyecz traded 10,000 Bitcoins for two
pizzas worth about $25 at today’s prices. Conventional money circulation is premised on government control and the Central Bank. These entities influence the supply of money in the economy.

Conventional monetary policy involves a set of instruments and strategies to control the money supply through economic policies. Conventional monetary policy is structured around three main concepts: open market operations, standing facilities and minimum reserves. The central bank is in almost all countries except North Korea, Iran and Lybia and has a monopoly on creating and issuing new money.

Global Financial Systems

After the end of World War 2, the new global financial system implemented by the allied forces adopted the US dollar as the reserve currency for all central banks in the world. This means that all the remaining currencies worldwide are backed by the US dollar. Central bank systems have been unpopular in many countries and have been associated with wealth inequalities in society. The people at the top of society accumulated astronomical wealth while those at the bottom languished in poverty. They have also been associated with high inflation rates in the economy and the trigger for global economic meltdowns. These problems lead to the rethinking of the conventional money policies leading to the invention of Bitcoin and other cryptocurrencies.

Block Chain Currencies

Bitcoin is a digital currency meaning it’s not issued by any central bank or government entity. It uses peer-to-peer technology (Blockchain) to operate with no central authority or banks managing transactions, bitcoins are managed by software. Bitcoins have a finite supply (only 21 million ever created) and they can be divided up and traded just like traditional currencies. As bitcoin is a decentralized currency that has no central bank or government that controls it and is capped at 21 million bitcoins, there is always a limited supply of bitcoins, which means that as more and more people adopt bitcoin as a form of currency, its value will increase exponentially.

Bitcoin circulation

How does a Bitcoin transaction work? A Bitcoin transaction works by sending coins from one wallet to another. This could be an online wallet or an offline paper wallet. Each wallet contains a unique address, which is where the bitcoins are sent when completing a transaction.

The receiving wallet can then send those receiving Bitcoins back to another address in their own wallet or they can send it back to the address they originally received Bitcoin from. If you receive bitcoin into your wallet and then send them somewhere else, it will be outside of your control whether or not those Bitcoins are stolen by a hacker and if they don’t reach the intended owner, they can’t be taken back.

How do I get bitcoins? There are many ways to acquire bitcoins, such as buying from a friend or an online service, selling goods for bitcoins online, and allowing bitcoin for online payments. Storing bitcoins in a digital wallet on one’s computer or mobile device and many other ways are being innovated as we speak.

Bitcoin is a cryptocurrency, which means that it is a digital asset that can be used as a medium of exchange with the help of the internet. Bitcoin trading platforms are the “stock market” for bitcoins. They allow you to buy and sell bitcoins without the need for a traditional stock market broker.

Bitcoin Trading platforms

The most popular Bitcoin trading platform for beginners and expert traders is Coinbase, which is a digital wallet that allows you to store your bitcoins. It also lets you make purchases with bitcoin and accept bitcoin as payment. Coinbase has a mobile app that makes it easy to buy, sell, and store your cryptocurrency on the go.

The app also lets you trade Bitcoin from anywhere in the world. Other Bitcoin trading platforms include Gemini, Kraken, LocalBitcoins, CashApp, Bisq and Binance.
We will explore Binance trading platforms in our next article as it offers a lot of assets for beginner and expert cryptocurrency investors and traders.

Just like any other business, there are risks associated with trading in bitcoin and other cryptocurrencies.

Bitcoin Trading Risks

Bitcoin Trading risks are associated with the volatility in the price of bitcoin. The price is determined by supply and demand, but because it’s not backed by any government, there is no way to control supply or demand. Bitcoin trading is frequently performed in any of the digital currency exchanges, this creates a larger market for traders leading to large transactions from crypto exchanges with each other in a short time. This drives up the frequency of price fluctuations.

Traders can mitigate crypto-exchange fluctuations by trading on an exchange. When you sell your cryptocurrency on an exchange,
you agree to sell it for U.S. Dollars (USD) at a fixed price that is pre-agreed upon by both parties. Other risks include hacking, fraud and market manipulation.

Bitcoin trading platforms can also help traders protect their assets from theft by keeping them in a digital wallet. In addition, most trading platforms offer margin trades which can mitigate the risks involved with shorting bitcoin and other cryptocurrencies. A list of bitcoin exchanges is maintained at bitcoin.org. Within that list, those exchanges that are available in the country and have clear licensing are highlighted or labelled as licensed.

For investors who want stability, new innovative products are being launched by these trading platforms. Coinbase has launched a new non-voting share class called XBT. An investor is now able to invest in bitcoin without worrying about the volatility of bitcoin as the security is assured by the trading platform.

Securities Investor Protection Corporation (SIPC)

Unlike traditional brokerage firms, crypto exchanges are not members of the Securities Investor Protection Corporation (SIPC). Your cryptocurrency is protected by the security council and can’t be liquidated. Exchange custodian protection plans are the easiest way to keep your portfolio safe from fraud, theft or other loopholes.

Bitcoin just like gold can also be “mined”. New bitcoins can be generated through a process called Bitcoin mining. This process
has become more complex and time-consuming in recent years, due to the improvements in specialized hardware for Bitcoin mining. Blockchain is a technology in which blocks are linked together to form a chain. It allows everyone involved in a transaction to see that it was valid and was processed by the network. Everyone can trust this information because Bitcoin nodes use the blockchain to identify legitimate transactions from a re-spend attempt. So, no one can change it.

Initial Bitcoin Investors

The initial Bitcoin investors were the ones who bought Bitcoin when it was still a new currency. They saw how valuable it could be and invested in it. Their Bitcoin investment strategies have been studied and forms the basis of new startups in the digital currencies space

The Winklevoss twins

Tyler and Cameron, are the most well-known investors in Bitcoin. They invested $11 million worth of Bitcoins into the currency when they first started. Marc Andreessen, who is known for his work on Netscape Communications Corporation, Andreessen Horowitz invested $20 million into Bitcoin. Venture capitalist Tim Draper and PayPal founder Peter Thiel both invested upwards of $20 million each into the currency. Other investors include Roger Ver. Gavin Andresen, Jon Matonis and Mike Hearn.

Bitcoin is becoming more popular, due to its lower transaction fees, increased privacy and non-interference of third parties. Several online retailers are now accepting Bitcoin as payment for their products and services. Some of the most notable names include Microsoft, Dell,
Newegg, Overstock and Expedia; the latter two accept bitcoin as payment for hotel bookings.

Peter Thiel

A co-founder of PayPal said that “Bitcoin is a real innovation,” and in early 2014 even went so far as to say that Bitcoin’s business was “worth more than the whole banking system.

As bitcoin and blockchain technology is gaining mass acceptance, governments and regulators have to step up their game to understand
the technology. This year has seen a huge increase in countries making strides with their efforts to regulate the industry, especially after a wave of negative news coverage. Bitcoin is one of the oldest and most popular cryptocurrencies in existence. For newbies venturing into cryptocurrency, they might want to start with the easiest options like buying a coin on Coinbase.

If you are considering investing in Bitcoin? Consider the benefits and risks first.

Bitcoins value projections

It’s been a rocky start to the year for Bitcoin, but experts still say it will hit $100,000 and that it’s more a matter of when not if. A senior bitcoin expert in the US noted that bitcoin remains anchored at around the $20,000 level and won’t break out until Wall Street is confident a broader slowdown is not happening.

Despite recent volatility, many experts believe that Bitcoin will pass the $100,000 mark in the future. It’s difficult to predict exactly when this will happen and opinions are divided on this. A recent study by a key German bank showed that about a quarter of Bitcoin investors think it will happen within the next year, whereas just 18% believe it’ll be worth more than $500k in five years.

7 Best Bitcoin Investment strategy: 

-Crypto due diligence

strategy for crypto trading-crypto investment scams are on the rise hence proper due diligence is required before investing.

-Manage risk

Learn from other experienced investors and crypto traders’ mistakes

-Crypto portfolio diversification

crypto portfolio-Don’t invest in only one cryptocurrency, spread the investment in several digital currencies.

-Bitcoin Automation

Auto invest bots purchases-this enable the investor to take advantage of the pound or dollar-cost averaging.

– Bitcoin long-term investment 

The projected increase in value in the longtime could give good returns as opposed to the day-to-day volatility.

-Avoid the common crypto mistakes:

Buying because the price is low; the assumption that investing in cryptocurrency is easy, deceit by scams, investing in fake coins, falling for hackers.

-Secure Online logins

As a potential online business and individual assets growth platform, The investor should Create 2-factor authentication confirmations when login into all your crypto investment accounts. Some trading platforms provide antiphishing codes that help secure your account from fraudsters and online hackers

Disclaimer:  The content shared for information purposes