By now you have already seen numerous news headlines. Bitcoin appears to be increasing in value. Of course you also want to invest in Bitcoin. Understandable, but it remains important that you know what you are doing. After all, you want to get a return on your investment.
Make money with Bitcoin
Do you also dream of a carefree life? Live on tropical beaches and never work again? Perhaps retire at 40 or earlier? We all want to make money with Bitcoin. But how does that actually work? What are the ways to do that? Now that you know that Bitcoins are safe, we will explain how you can make money with Bitcoin. Or lose, of course. Even though you may not be thinking about it right now.
There are several ways to make money with Bitcoin. Be aware that Bitcoin is very volatile. The value of Bitcoin rises and falls. If you start working with Bitcoin, there is a chance that your money will become worth more, but also less. So never put all your money in Bitcoin or other cryptos. Only do this with money you can afford to lose.
Do you want to start with Bitcoin? Then there are a number of ways to make money. We put them together for you.
Investing in Bitcoin
Getting started with Bitcoin is exciting. You can make a lot of money by investing in Bitcoin. The value of Bitcoin has increased dramatically in recent years. Many people have become millionaires with Bitcoin. The most common way to do this was by investing in Bitcoin. Do you buy Bitcoin and does it increase in value? Then you have made money. The difference between the amount of your purchase and the amount of the sale is called return.
Just like investing in shares, investors in Bitcoin strive to achieve the highest possible return. Bitcoin has achieved positive returns in recent years. In 2020, the price of a Bitcoin rose by almost 300%, from approximately € 6,500 to almost € 24,000. Do you assume that the value will continue to rise? Then compare Bitcoin providers.
How Much Should You Invest in Bitcoin?
Of course an important question. The price of Bitcoin is volatile. On some days the value increases by more than 10%. But no market goes up in a straight line. So only invest an amount that you can afford to miss. And put time into understanding Bitcoin. The technology and potential merits are wonderful. But not without risks.
Bitcoin and other cryptocurrencies are becoming increasingly popular. Large institutional investors – such as pension funds and asset managers – are also getting into Bitcoin. They do not do this with the entire capital they manage. Maintain a financial buffer of 6 to 12 months. If – for whatever reason – things go wrong, you still have a nest egg.
The difference between Bitcoin and stocks
Although there are certainly similarities between Bitcoin and stocks, there are also important differences. When you buy a share, you are in fact buying a piece of ownership in an organization. To some extent there is no difference with Bitcoin. You actually buy a piece of information that is stored in the blockchain. This states that you are the owner of Bitcoins and other information surrounding the transaction. So the main difference is not so much ownership. Owning a share gives you ownership of an organization. When you own a Bitcoin, this makes you the owner of a Bitcoin.
However, there is a difference in the rights arising from this right of ownership. Shares give you some entitlement to a physical company, or the profits that arise from its business operations. Often in the form of dividends. That is not the case when investing in Bitcoin.
However, you can enjoy the increase in the price of a share or the Bitcoin price with both shares and by investing in Bitcoin. Are you curious about the price development of many different cryptocurrencies? Then take a look at coinmarketcap.
Tips for investing in Bitcoin
Do you opt for a long-term investment or do you want to work with Bitcoin on a daily basis? We warn you in advance. Once you really start investing in Bitcoin, it quickly becomes a bit addictive. You regularly hear from novice and more experienced investors that the first thing they do in the morning is to look at the value of their assets. To prevent you from making a number of mistakes, here are some tips.
Start with a plan. Determine in advance how much money you want to invest in Bitcoin. Don’t invest more than you can afford to lose. Also decide in advance when you will get out.
Determine what your goal is and how quickly you want to achieve it. This determines whether you invest in Bitcoin via an exchange, or whether you store your Bitcoins directly in a wallet, so that you no longer have to worry about this.
How much time do you want to spend investing in Bitcoin?
Think about safety. Never share your private keys with others.
Are you going to actively trade? Then make sure you get started via a reliable exchange. And make sure you set up 2 Factor Authentication (2FA). In the Netherlands, the reliable exchange Bitvavo is a good tip.