Bitcoin has become a prominent investment digital currency in our world today. It has gathered a lot of digital investors worldwide and is still getting a lot more attention with its continuous increase in price and value. However, Bitcoin is not a miracle asset and will still depend on your investment activity and strategy.
What Is a Bitcoin Investment?
A Bitcoin investment is not your ordinary stocks and bonds that are issued by public corporations. It is a decentralized digital currency that a person can send to another person electronically worldwide. The people behind Bitcoin developed it expecting that it will become a truly international currency, removing the connection to any government, bank, or corporation.
The popularity of this digital currency has sky-rocketed, with more individuals learning about how it works, including notable people and organizations. As a testament to this, the brand Tesla has invested in BTC worth $1.5 billion and even welcomes cryptocurrency as a mode of payment for their cars.
The number of sellers accepting BTC is also increasing. And for times when crypto is not a viable option, there are even Bitcoin ATMs that can be found using platforms like Pay Depot. Additionally, Bitcoin is still developing and growingto perform better functions and becoming the digital version of gold.
Things to Examine Before Investing in Bitcoin
If you’re already interested in investing in Bitcoin, here are some things you should contemplate about:
The Current Market Price Is Already High
With the recent months’ affecting and encouraging surge of the current price, investing in Bitcoin today might not be the wisest decision. Because of this high fluctuation, many experts believe the Bitcoin will crash in a few weeks as a reasonable outcome.
Although, as all investments are a gamble, you are still free to invest in Bitcoin. This is because even if it’s not the most favorable condition to invest in right now, it’s also not the worst. Predictions by industry watchers also include Bitcoin hitting $100,000 as 2021 reaches its end. However, predictions tend to go both ways, so you should still be ready if the market crashes and fails to give you the profits you want.
Real-World Bitcoin Usage Isn’t Common
In the United States, about 2,300 businesses, including TeslaCompany and 15,174 businesses worldwide, accept Bitcoin. Although there are thousands of transactions made in Bitcoin every single day, it’s still not as popular with commercial transactions.
In reality, there are actually aren’t that many businesses using Bitcoin. In addition to this, there are more Bitcoin hoarders in the market, blocking the actual usage of Bitcoin. Because of this, Bitcoin circulation is effectively hindered. This is also why it has a store value rather than a medium of market exchange.
Tax Reporting Can Be a Hassle
Cryptocurrency investors should know and understand that these assets are considered property and are therefore taxable. This virtual currency, as far as the International Revenue Service is concerned, is akin to your other assets such as stocks or gold. Any cost, gains, and losses will be appraised.
It’s very critical to properly calculate your gains or losses because the IRS’s tax forms already dedicated a section for cryptocurrencies. To be sure about your tax reporting with your income, holding, and gains properly, you should reach out to an expert. It can be a hassle learning the ins and outs of cryptocurrencies and their taxes. But if you want to invest in Bitcoin, it’ll be beneficial to you in the long run.
What Are Your Goals?
Whenever you make investments, you should consider your goals and plans for the future. It is important to know the risk and rewards of this digital currency. This is because the high value of Bitcoin today also means a higher risk of investing at this very moment. However, if you want to expand and grow your assets and can afford the risk that comes with cryptocurrencies, Bitcoin is a worthy investment. Although, you should always be careful with your investments in any cryptocurrencies still.
As a newbie Bitcoin investor, confirm that your goals are aligned when making an investment. Don’t ever invest more than you can afford to lose. The cryptocurrency assets are risky enough due to relatively new developments. Know your boundaries and manage your potential losses by carefully reviewing and setting a cap so you know just how much you can invest.
Will It Be Worth It to Invest in Bitcoin Today?
The main cryptocurrency and the safest one to invest in today is still Bitcoin. It has the biggest market capital and is considered as “digital gold” and a high value.
In the end, whether you invest in crypto or not solely depends on you as an investor. If the remaining potential of Bitcoin still catches your interest, then you should go for it. If you’re planning on investing in Bitcoin, you can visit reliable sourcesand keep learning to make informed decisions.