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Bitcoin Investment – how to invest in Bitcoins
Currently the digital currency cuts all the records. For months the price for Bitcoins has been increasing fast. Due to the fast rise and the increasing popularity, many decide to engage in the Bitcoin investment. And they are right, as investing in Bitcoins can lead to profitable returns.
The digital currency Bitcoin can turn into a profitable form of investment. The Bitcoin investment offers some very high returns. However, everyone who wants to trade with Bitcoins should do some thorough research beforehand. Even through Bitcoin is currently on a successful path, trading option are not risk free.
What are Bitcoins?
Bitcoin (BTC) is a digital currency (crypto currency) which is electronically created (mined) and also administered. Unlike other currencies, such as the Euro or the US Dollar, Bitcoins are neither printed nor resp. created by central banks, they are calculated by countless people around the world with the help of computers. Hence, Bitcoin is not subject to governmental or central control. The decentralization is one of the major aspects of Bitcoins.
It is said, that a software developer using the pseudonym “Satoshi Nakamoto” invented the Bitcoin. It is however unknown if this was a real person or a group of people. But it is a fact, that the Bitcoin protocol was developed for a maximum of 21 million Bitcoins. The coins can be divided in subunits (Satoshi). The smallest amount is one hundred millionth.
Bitcoin is not based on a network of institutions, as the digital currency is only based on mathematics. The software resp. open source software is used by people around the world to generate Bitcoins. This process is called mining. Blockchain on the other hand is the name of the technology on which Bitcoin is based.
The most important aspects of Bitcoins
One of the most important features of a crypto currency is that no financial-political institution is allowed to intervene with the Bitcoin network. In case the system goes offline, the Bitcoins are still valid. Purchasing Bitcoins is not as easy as it seems, especially for someone who is not familiar with the world of crypto currencies. Bitcoins are bought at a special stock market. Afterwards they need to be transferred to and stored in a wallet. Everyone can open one or more wallets without providing any data upon registry.
Users of crypto currencies also like the anonymity. Every transaction is stored in the blockchain, which can be compared to a giant register. In case someone owns a public Bitcoin address, everyone can see it here. But you can’t see who this BTC-address belongs to.
The transaction fees are of course advantageous, too. An international bank transfer at a classic bank can become price fast. For Bitcoin transactions it doesn’t matter if the recipient of your money is located in the same country or abroad.
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How to invest in Bitcoins
Those who want to profit from Bitcoins neither need to buy Bitcoins nor open a wallet. Investing can be done even easier: meanwhile some reputable online brokers offer trading with Bitcoins. Margin trading is a really popular feature. You just need to open a trading account with a broker, which can be done within a few minutes. Then you place trades on the quotation of Bitcoins. The advantage of margin trading is that you only need to invest a small fraction of the real trading volume. Let’s assume you invest 1,000 Euro in Bitcoin CFD and the online broker demands a margin of 5 percent. In this example the trader uses 50 Euro of his investment but basically trades with 1,000 Euro. The remaining 950 Euro are given to the trader by the broker as some sort of loan. If the Bitcoin quotation develops as predicted the trader may be able to win a high return.Klicken Sie auf den Link "Jetzt KOSTENLOSES Demokonto eröffnen"
But be careful: In case the quotation does not go as predicted, the trader may not only use his stake but may, in worst case scenario, have to pay back his “loan”. However, some brokers don’t have a margin obligation and also offer different tools for risk minimization. Hence it is important to choose the right online broker as your trading partner.
The online broker eToro is a great example. Aside from the classic trading this broker offers the option to copy trades from experienced traders. This still is not a 100 percent guarantee that you will win, but this kind of trading is highly suitable for beginners.
A different and popular version of trading is trading binary options. This neither contains a margin nor can it be seen as a lever option. But still you place bets on rise or fall. The duration of the trade can be set by you as well. Everything is possible, from a few seconds, to minutes, a few hours or even days. If the expected quotation does not occur, the trader just loses his or her wager.
Tips for Bitcoin investment
All in all, it shall be stressed again, that trading Bitcoins does not need to be a complicated matter. Using the right online broker investing in Bitcoins can be very easy. But yet you shouldn’t jump straight into trading. Before trading you need to familiarize yourself with the basics of the financial markets and the stock exchange. It is also important to monitor the development of the Bitcoin quotation for some time to be able to make better predictions. It needs to be noted that the Bitcoin quotation is highly volatile. If the BTC quotation falls for a while it may rise significantly within seconds or vice verso. Therefore, traders need to be very flexible and act fast.
It is indeed possible to earn high returns investing in digital currencies such as Bitcoin. But entering the world of investments shall be thought through very well. Those who want to invest a lot of money or who panickily buy and sell are agreeing to take a high risk. Therefore, beginners should begin by investing small amounts to reduce the risk of loss. Many online brokers offer a free account for practicing as well. Here traders can try Bitcoin investment for free and get a feeling for the trading options. Additionally, most brokers also offer countless information material as well as classes. And those, who use these options, will be well prepared for Bitcoin investments.
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