One of the newest investment tracks of the last few years has been Bitcoin.
The name alone can intimidate even the most seasoned investor. And to many, this new technology looks complicated from the outside.
Instead of investing in something you don't fully understand, check out our FAQs and articles to learn about the technology.
Just like any other investment, the Bitcoin price fluctuates over time. There are ups and downs that can look scary but really aren't. Learn more about the Bitcoin price today through our informative resources online.
What Is Bitcoin?
Bitcoin is a digital currency. Bitcoin is regulated by a decentralized network, meaning there's no one controlling source and very little opportunity for corruption. Strong forms of encryption are used to verify the generation and transfer of funds, making the network secure.
How Does Bitcoin Have Value?
You wouldn't be the first person to question how a digital currency, with no true form, can have value. It doesn't really exist, so how can it be worth anything? This is a foundational question to understand before you'll want to invest in Bitcoin.
Bitcoin derives value from its utility. It's used as a medium for exchange online. That has value, giving value to Bitcoin and allowing you to give Bitcoin a price.
Right now, much of the current value of Bitcoin is driven by speculative interest. But as a wider audience adopts and uses Bitcoin, it will gain more utilitarian value and therefore monetary value as an investment.
How Can I Buy Bitcoin?
There are multiple ways you can buy Bitcoin. Bitcoin is purchased by exchanging dollars for Bitcoins. The Bitcoin price is volatile, so what you pay for your investment will change depending on the time.
Bitcoin can be purchased online through an exchange or through a brokerage service. Some cities also have Bitcoin ATMs, where you can purchase some of the digital currency.
If you're tech-savvy, you can also mine Bitcoin. By lending your computing power to solve algorithmic equations or checking Bitcoin transfers on the blockchain network, you can receive payment in the form of Bitcoin. This is known as "mining" Bitcoin.
What Can I Do With Bitcoin?
Much of what you can do with Bitcoin currently is speculative. Many products and uses are still in beta-testing or development. But, there are currently some actual uses for Bitcoin. You can purchase items, play games, and even donate to charity.
Don't forget, Bitcoin is (speculatively) an appreciating asset. Over a long period of time, Bitcoin should gain value making it a potentially wise investment.
Choosing Bitcoin or Other Investments?
Something that's new is always slightly riskier than something that's been around longer. With that in mind though, some interesting information has come to light.
Recently, Bitcoin has seen less volatility than some of the biggest stocks., In fact, the Bitcoin price has been more stable than Amazon stock in October 2018. The historical volatility of Bitcoin over a 20-day period is 31.5%.
In comparison, Amazon's historical volatility over a 20-day period in October 2018 is 35%.
Bitcoin might be a new way to invest, but that certainly doesn't mean it should be automatically discounted.
For an investment that's safer than investing in Bitcoin, consider investing in gold. This precious metal has utility in the jewelry market and has been around as an investment tool for centuries.