Bitcoin is a decentralised digital currency that lets people trade money with each other without going through intermediaries like banks. It was made by an unknown person or group of people named Satoshi Nakamoto in 2009. Bitcoin uses block chain technology, ensuring all transfers are clear and safe. In this article we will discuss the Advantage of investing in bitcoin or how to buy bitcoin? So without wasting more time let’s continue in detail.
How do you use Bitcoin?
Bitcoin runs on a network of computers called “nodes” that are not connected. These nodes keep track of all Bitcoin transactions in a shared book called the block chain. When a user starts a transaction, the network verifies it by “mining.” Miners solve hard maths problems to confirm the transaction and add it to the block chain, making it impossible to change.
Advantages of Investing in Bitcoin
There are several benefits to investing in Bitcoin:
Potential for High Returns
Bitcoin’s price has increased a lot, attracting buyers who want to make a lot of money.
Diversification
Bitcoin allows adding assets other than stocks and bonds to your trading portfolio.
Global Accessibility
Bitcoin can be used and sold around the clock, so people worldwide can participate in its ecosystem.
Security and Privacy
Compared to traditional banking methods, Bitcoin transactions offer more security and privacy.
How to Purchase Bitcoins
Choose a Good Exchange for Cryptocurrency
Do some research and choose a Bitcoin-supporting cryptocurrency market that you can trust. Coinbase, Binance, and Kraken are all examples.
Make an account
Sign up for an account on the exchange site of your choice by giving the necessary information. For extra protection, choose a strong password and turn on two-factor authentication.
Go through the verification process
Depending on the exchange, you may need to go through a verification process to follow the rules and make the system more secure. Most of the time, this means showing proof of identity and proof of location.
Protect Your Account
Set up extra security steps, like a hardware or software wallet, to protect the Bitcoins you own. These wallets let you store and encrypt your digital goods offline.
Deposit Money
You can put money into your exchange account using a bank transfer, a credit/debit card, or another accepted cryptocurrency.
Place an order
Once your account is funded, go to the exchange’s trading area and order to buy Bitcoin. You can say how much Bitcoin you want to buy or how much real money you are ready to spend.
Bitcoin price
Bitcoin’s meteoric rise in 2017 caused a lot of attention
In 2017, the bitcoin price went up like never before, which got everyone’s attention. People learned about the coin because the news reported how quickly its price increased. Some of the things that led to this bull run were:
More interest from institutions
Initial coin offerings (ICOs) are becoming more and more famous. Small investors are dealing with speculation. In December 2017, Bitcoin hit its all-time high price of almost $20,000, but the price dropped sharply soon after.
The Crypto Winter: Bitcoin’s Sharp Drop
After its peak in 2017, Bitcoin fell for a long time until early 2019. When the speculative bubble burst, prices dropped significantly, making many buyers lose faith. Regulatory problems, such as the government cracking down on exchanges and putting in place tighter rules, also made the market less optimistic. During this time, the price of Bitcoin stabilised, staying between $3,000 and $4,000 for a long time.
The Comeback: Bitcoin’s Comeback and the Mature Market
Starting in 2020, Bitcoin had an amazing comeback. Institutional investors like Micro Strategy and Tesla have made it public that they have bought Bitcoin. This gives the asset class legitimacy and authority. The decentralised finance (DeFi) movement grew, with Bitcoin as the base asset for many new financial apps. During 2020 and 2021, the price of Bitcoin went up, hitting new all-time highs and passing $60,000 early in 2021.
Factors affect the price of Bitcoin
The price of Bitcoin changes a lot because of many different things. Demand and quantity in the market are very important, and when demand goes up, prices go up. Regulatory changes like new laws and government actions can affect how people feel about the market and how prices move. Bitcoin’s instability is also affected by how investors feel, such as fear or greed. Also, financial factors like worries about inflation and events in geopolitics can affect the price of Bitcoin.
Demand and supply on the market
The price of Bitcoin is affected by how many buyers and sellers there are on the market. When there is more demand than supply, prices increase, and vice versa.
Technological Progress and Adoption
The price of Bitcoin can be affected by technological progress in the block chain industry, such as growth solutions, better security measures, and faster transaction speeds. The cost can increase if more people, companies, and financial institutions use Bitcoin.
The regulatory environment
The price of Bitcoin can be affected by what governments and financial officials do regarding rules and regulations. The cost of cryptocurrencies can increase if the government makes good rules for them and accepts them more. On the other hand, if the government makes rules that are bad for cryptocurrencies or bans them, the price can go down.
