Bitcoin reached a value of 400 US dollars in November 2015. An article from Bloomberg reports that this price has increased positively and is likely to rise significantly. Bitcoin is a digital asset (electronic money, cryptocurrency) that was developed in 2009 by someone under the pseudonym Satoshi Nakamoto.
The article states, “Bitcoin is advancing. Earlier this week, we found virtual currencies on a rising streak. Nearly 40% in the last three days.”
The United States Treasury Department calls bitcoin a decentralized currency. The distributed database spreads over the nodes of the P2P network. This allows for anonymous ownership and more efficient transfer of wealth.
The Bloomberg article stated that analyst Gil Luria of Wedbush Securities wrote in 2014, “We believe bitcoin and similar blockchain technologies have the potential to disrupt financial infrastructure over the next few years. We believe the value of the bitcoin currency is benefiting from this trend.”
Bitcoin is an electronic currency that relies on transactions open to the public with a blockchain technology system
Still in November 2015, Paul Vigna of the Wall Street Journal wrote for his column, “The price of bitcoin soared, crossing the US$400 mark for the first time since last November, amid a surge in trading activity and growing interest in the technology underlying electronic money.”
Bitcoin’s highest exchange rate in June 2016 was 768 US dollars. Then, bitcoin faced a volatile period. This is because a bitcoin exchange hack occurred. The price of bitcoin has also fallen. Do you need to consider investing in bitcoin?
Can you multiply profits with Bitcoin?
Bitcoin is the most famous digital currency today. All bitcoin transactions are open and stored in a database. This makes it easy for bitcoins to be distributed. To prevent double spending, the peer to peer network ensures the safe use of bitcoins.
Previously, there were not many e-commerce that served purchases with bitcoin. However, now many purchases offer this option. Overstock.com, Dell, Microsoft, Reeds Jewelers, and even Sacramento Kings allow credit card purchases that are automatically debited to a bitcoin wallet.
Bitcoin is a currency that can be compared with other currencies in forex, either the US dollar or the yen. The bitcoin exchange rate even showed the best performance in 2010, 2011, 2012, 2013, and 2015.
What happened in 2014? Bitcoin has crashed. Let’s find out what causes this bitcoin volatility to occur.
Bitcoin is an alternative investment
Since the value of bitcoin can be denominated in dollar value and the market determines its value fluctuations, bitcoin can also be an investment vehicle. Bitcoins are traded on exchanges around the world 24 hours a day. We will always know the value of bitcoin in US dollars or local currency.
But before you jump in and decide to buy bitcoin, and consider it an investment, you need to make a financial plan and strategy based on your current situation. Think more wisely about your current goals, goals and asset allocation.
This is the time for investors to see bitcoin as an electronic currency that can be considered as a portfolio. As an alternative investment, bitcoin can be an option if you want to diversify your investment.
Alternative investments are generally not correlated with other types of investment. That is, bitcoin is an alternative investment unrelated to stocks and bonds. This causes their value to differ from other investments.
For years, investment firms have advised taking a little risk on high-value assets, in favor of old-age investments.
They generally suggest hedge funds, personal equity, gold, forex, and property as the types of investments to take. Bitcoin is an alternative investment that should also be considered because you can monitor its price live and exchange it online.
How to invest Bitcoin?
The easiest direct way to get bitcoins is to use the Coinbase or Lawnmower app. Coinbase is one of the most trusted exchanges–backed by investors who have also invested in the NYSE. You can create a “wallet” or wallet there and buy bitcoin or ether (ethereum).
Lawnmower is a new mobile application that allows recurring bitcoin purchases and provides in-depth analysis and data on bitcoin movements. Not just bitcoin, this app also keeps an eye on all other e-currencies, such as ethereum, dash, and ripple.
Using the Coinbase wallet allows you to track an index of the top cryptocurrencies, known as the Lawnmower Blockchain Index.
Apart from that, you can buy it through the stock exchange, Bitcoin Investment Trust trades it with the code GBTC on OTCQX. The underlying value of the GBTC stock is 1/10 of the bitcoin’s true value. If bitcoin is sold for 300 US dollars, then the underlying value of GBTC shares is around 30 US dollars.
Invest in blockchain technology
If you are still skeptical of directly investing in bitcoin or other cryptocurrencies, but you believe in the potential of blockchain technology – the infrastructure that makes bitcoin possible – then you can consider investing in shares in companies that include blockchain technology in their business.
R3 Consortium is one of the business groups that use blockchain technology. They are a combination of nine investment banks that are actively piloting this technology. The goal is to obtain better infrastructure and systems for asset management.
The group includes JP Morgan Chase, Goldman Sachs, Credit Suisse, State Street, UBS, Commonwealth Bank of Australia, BBVA, Barclays and Royal Bank of Scotland. Now, it covers 40 banks and they are looking for non-bank partners.
IBM is one of the big companies that is very intense in implementing blockchain technology. They are aware of the security offered by this technological system.
So, if you are an investor who is interested in the disruption caused by bitcoin and blockchain technology, there is nothing wrong with investing.
In addition to the availability of bitcoin as a currency and the presence of Bitcoin Investment Trust shares on the stock exchange, you can consider investing in companies with blockchain technology.