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dimanche 24 janvier 2021

Investing in Bitcoin: analysis of the virtual Eldorado

 Investing in Bitcoin: analysis of the virtual Eldorado

invest bitcoin

Summary of the article 1. How to invest in Bitcoin? 2. History and evolution of Bitcoin 3. Frequently Asked Questions
In 2008, the bankruptcy of the American bank Lehman Brothers led to a series of chain reactions and the world was hit by the economic crisis we are experiencing. Another consequence was that an unknown person under the pseudonym Satoshi Nakamoto invented the first virtual currency in 2009: Bitcoin was born. More than ten years later, how is the historic crypto currency doing? Would it be more interesting to invest in Bitcoin in 2021 than in 2020? Cryptocurrency market analysis, advice and opinions: Tacotax helps you to invest in Bitcoin.

Discover the best cryptocurrencies to invest in
How to invest in Bitcoin?

Whether you're looking at Bitcoin with the idea of investing or you're simply passionate about crypto currency, there are certain criteria that are essential when buying Bitcoin: Find out about the platform where you want to buy: to do so, you can go to forums or specialised websites. Means of payment: some platforms only offer payment by credit card, but it is possible to buy Bitcoins by bank transfer or PayPal. The price of Bitcoin can vary significantly from one platform to another.
The amount of the fee in the form of a commission on purchase or resale. The security of the buying and selling platform. The responsiveness of its customer service. How to invest your money in Bitcoin? Although Bitcoin can be used to purchase goods and services, payment by crypto currency is still not widely available, making it difficult to use in everyday life.

As a result, it is more than ever considered as a financial crypto asset to invest, as an investment that could well be profitable. Investing in Bitcoin means betting that this innovative technology will be sustainable, to say the least. Opinions differ on investing in crypto money: it is certain that when buying or trading in active crypto money, it is necessary to be in a situation where one can afford to lose the money invested. If you wish to invest money in Bitcoin, you can either buy tokens (crypto currency coins) or go through an online broker offering crypto currency trading via Contract For Difference (CFD), such as eToro for example. In terms of investing in Bitcoin on the stock market, the US platform Bakkt, run by the Intercontinental Exchange, was one of the first to offer the buying, selling and storing of crypto currency, followed by many US banks. You can thus become the proud owner of Bitcoins by selling a property to a private individual and require payment in crypto currency, or by doing a conversion exercise from a classic currency (in our case, the Euro), to the so-called encrypted currency. To do this, it will be necessary to go through specialised platforms by registering in advance. It is necessary to create a portfolio before buying Bitcoins: after all, you have to store your currency somewhere! This virtual portfolio will take the form of a series of numbers and a secure password called a code. To store their Bitcoins, investors use electronic wallets resembling a USB key to avoid leaving their corners on the trading platforms. ► Read also: The guide to investing: our advice

Which site to buy Bitcoin?

To invest effectively in Bitcoin, it is essential to know the net and the financial markets. Transactions to buy crypto currency are carried out via platforms that charge a commission of between 2% and 10% for each transaction. It is essential to use secure and popular websites and platforms:

Site For whom? What is it for? Where? Crypto coins available Fees Payment method Coinbase Beginners Buy / Sell United States Bitcoin, Ethereum, Litecoin High rates CB, transfers, crypto-money eToro Beginners Trading Cyprus Bitcoin, Ethereum, +12 Means CB, bank transfer, PayPal Experienced Kraken Trading United States Bitcoin, Ethereum, +15 Low rates CB and wire transfers Binance Experienced Trading Asia Bitcoin, + 200 Low rates Crypto-currency only Coinhouse All profiles Trading, buying and selling France Bitcoin and Ethereum Means CB, prepaid cards...
In addition to the platforms listed above, there are many others whose rates vary. In any case, be sure to find out about the security of the site in question: scams and risks are always present, although they have been reduced over the last few years. For example, $1 billion worth of bitcoin was stolen in the year 2017, and $1.1 billion in just one quarter in 2018! ►Lire also: Where to invest abroad? Crowdfunding in crypto currency With the introduction of the various crypto-currencies, it did not take long for different uses of this new technology to emerge. Thus, it is now possible to invest differently: crowdfunding crypto-equity is a perfect example of this. Behind this anglicism lies a simple principle: that of financing projects by raising funds from individuals or professionals, who will be able to support the project via crypto-currency! The latter will thus finance the creation of companies since the year 2014 on dedicated platforms, Swarm for example. Our advice for investing in Bitcoin Funny product we have here. Certainly, investing in Bitcoin is not the easy way out, compared to other financial products and other shares on the stock market, but in some cases it is worth the risk. Only in some cases is this repeated, since it is estimated that the ¾ of the buyers of crypto currency end up losing the amount of their investment. In other words, only invest what you can afford to lose! But why is that? Quite simply because the price of Bitcoin is highly unstable. We are talking about extreme volatility here: the magnitude of the variations in the price of crypto currency peaks at 133% on average over the year. For example, the rate for gold is only 20%. To generalise, this means that you can gain very much, but also lose a lot. Are you still optimistic? The year 2017 saw the price of bitcoin skyrocket, leading to a capital loss of 80% of their bets to investors that year. In 2017, the price of bitcoin was $20,000 per unit. Two years later it was $4,000. So, to invest in this virtual gold, you are advised to : Learn as much as you can about Blockchain technology, the fundamental system of crypto money. Invest in the most popular crypto currencies: Bitcoin remains the "safest" value compared to the plethora of new virtual currencies. Keep yourself constantly informed on official websites and enter a community (Reddit or Slack for example), in order to trade with other investors. Investing in Bitcoin will thus require consultation in numerous forums!
Limit your investments: Bitcoin's volatility will be the main reason why you should not invest all your capital in crypto currency, a market with a high risk of losing money.
Investing 100 euros in Bitcoin may prove profitable in the long term in some cases, with a significant amount of luck, but you should bear in mind that it would be counterproductive and dangerous to invest all your money in a financial product whose value is constantly fluctuating. ► Read also: Investing in a company: what you need to know Discover the best cryptocurrencies to invest in History and evolution of Bitcoin

How does Bitcoin work?

When the world's governments accumulate ever-increasing debts in 2008 and the US bank Lehman Brothers suddenly goes bankrupt, the world plunges into a violent economic crisis. In response, huge amounts of cash are being printed, which is losing value as it goes down. Under the pseudonym Satoshi Nakamoto, an individual sets out to propose a peer-to-peer money transfer system entirely online, which is the antithesis of the monetary fiduciary policy of the time. The primary objective of crypto-money was then to free money from the control of those guilty of dragging the world into a financial crisis, by proposing a stable, predictable and above all transparent system.

Conceived as a limited store of wealth, Bitcoin proposed a vision of electronic money freed from the yoke of any central bank: Bitcoin is not unlimited or expandable, unlike paper money,
The supply of bitcoins being created is halved every 4 years. The last reduction took place in May 2020.
Bitcoin is usable by everyone and has no government or custodian, unlike fiat money, again, which is accessed by banks. But is Bitcoin finally the peer-to-peer system without third parties that was originally intended? There are only 21 million Bitcoins in the world in all, with more than 18 million in circulation today. It is a limited, and therefore rare, commodity. This inevitably leads to a reluctance on the part of bitcoin owners to spend them, preferring to store them and wait until their value increases over time. In the end, it is rather an impression of a store of value that emerges from this crypto-currency. ► Read also: Understanding investment to invest better The blockchain: how to leave the banks aside A blockchain is literally a sequence of numbers that is stored on a computer and takes the form of chains of blocks. All of the peers (users) present on the network will validate and confirm each of the transactions carried out (purchase, sale, transfer, etc.). There are no third parties: this is called a distributed register which then secures the data. Miners are those who produce bitcoins and are rewarded in tokens. All the transactions are thus distributed over the network in "peer-to-peer" through nodes. Each transaction carried out actually adds a link to a virtual chain: all these blocks are present and constitute the blockchain, which is permanent and immutable. In this way, crypto currency does not depend on any government or bank as a third party. ► Read also: Ripple: the neutral agent of cryptomoney Investing in 2021: a good idea? To invest in Bitcoin and crypto money in general, you need to understand its evolution: in 2019, the values were different than in 2020 and now 2021. At the time of writing, opinions diverge as to the rebound potential of active crypto: 2021 has already signed the explosion of bitcoin, whose value exploded at the beginning of the year. As we saw earlier, the supply of new bitcoin being created is reduced by 50% every four years. It so happens that 2020 was one of those years: in May, the block of bitcoin is reduced, thus impacting its very value. One can then legitimately wonder if this year could be a record year, since historically : 2012: the first historical reduction in the number of bitcoin coming onto the market. We are going from 50 bitcoins per mined block to 25 BTC.
2016: second reduction in the number of bitcoins. From 25 to 12.5 BTC.
2020: third reduction in the number of bitcoins. From 12.5 to 6.25 BTC.
Interestingly, the first halving in 2012 pushed the BTC to a record level in 2013. The same thing happened in 2017 after the reduction in 2016. From this to speculating that the value of bitcoin will take off in 2021, after the 2020 cut, there was only one small step: demand will inevitably increase while supply simply can't keep up, thus increasing the value of BTC. The year 2020 also marked the arrival of Diem (formerly Libra), the crypto-currency of the BTC, in great pomp and circumstance.... Facebook! Indexed to a basket of stable currencies (50% of the dollar, 18% of the euro, etc.), Le Diem will be able to be transferred between peers via applications (PayPal, Lydia, etc.). The Calibra application will serve as a virtual wallet to buy, sell and store the US giant's crypto currency, which should also work on Whatsapp, Instagram, Messenger, Uber, Spotify, Booking, etc. A future revolution? Diem is expected in early 2021. ► Read also: Investing in real estate: how to make a successful real estate investment? Hold & Trade The many existing crypto currencies, from bitcoin to tether and ethereum, prove their durability every year. The future will be virtual, and many investors have taken up the challenge of crypto currency and its market capitalisation. Find below the values of the main crypto currencies in March 2020 (these values are extremely versatile and can change in a few minutes - this is an indicative table):

Name Market Valuation Average Price (USD) Number Outstanding Growth in 1 Year Bitcoin (BTC) + of $140 billion $7,900 $18,261,937 + 156 Ethereum (ETH) + $22 billion $200 110,024,372 + 89% Ethereum (ETH) + $22 billion $200 110,024,372 + 89 Ripple (XRP) + of $9 billion $0.21 $43,818,008,717 - 9% Ripple (XRP) + of $9 billion $0.21 $43,818,008,717 - 9 Bitcoin Cash (BCH) + $4.8 billion $260 $18,321,238 + 85% Bitcoin Cash (BCH) + $4.8 billion $260 $18,321,238 + 85 Tether (USDT) + by $4.6 billion $1 4,642,367,414 + 129 Bitcoin SV (BSV) + of $3.5 billion $190 18,318,402 + 371 Litecoin (LTC) + $3.1 billion $49 64,254,075 + 129% Litecoin (LTC) + $3.1 billion Whether you want to invest in Bitcoin, Bitcoin Cash or Ethereum, there are two main strategies available to you: hold on one side, and trade on the other. On my left is the holding of long-term active crypto assets, and on my right is the strategy of regular buying and selling. Which one will suit you? Hold is generally more practical for beginners, as it will suffice to buy Bitcoins and store them in a virtual safe. You can thus bet that the value of the BTC, for example, will increase drastically, especially after a reduction in production. If this is the case, it's up to you to decide when you will be able to collect your profits: when your bet is multiplied by two, three, etc. Setting goals, but above all sticking to them, is very important in a hold investment, where you keep your crypto active until the moment your losses have to be cut, or your profits touched. Then comes the trade strategy. Generally reserved for the regulars of the crypto currency market, here it will be a question of buying and selling bitcoins over a short period of time, taking advantage of the troughs and curves of its value. To do this, it will be necessary to know and understand the evolution of the crypto-currency rate and to quickly buy Bitcoins and sell them on the spot when the rate is rising.

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