Cryptocurrency never seems to be out of the news. Whether the chat is about it being a fantastic new payment method, a great investment, or an enabler of shady underground dealings? It can be all or none of these things. But we know that investing can yield results if done well. What are the best methods to see a return on our money?
Mining
Mining for bitcoin is the original way to make a profit with Bitcoin. Why not go to the source and get those shiny new coins? Well, it all depends on the cost-benefit analysis. If it costs less than the value of the coins to mining them, then it’s worth it. How do we ensure a profit? Since you are solving vastly complex mathematical equations, you need computing power. This costs money, both in the purchase of the hardware and in the substantial electricity costs of running a mining machine. You can also use cloud processing power, but again that comes at a cost.
Cryptocurrency Exchange
You can buy and sell Bitcoin. It’s as easy as knowing where to buy Bitcoins and getting going. But how to trade them to make a profit is the real question? Be wary of where you buy your Bitcoins from, as many new exchanges pop up all the time, and often they are little more than a scam
Day Trading
Day trading is an interesting one and a way of potentially making a huge profit if you play it right. If you play it wrong, however, it could be a disastrous mistake. You need to buy Bitcoin when it is low and sell within a short period when it goes up. Predicting this short-term rise and fall is tricky and requires a lot of experience.
Long Investment
If you are not in a rush and are happy to play the long game, then it is easier to make a profit, although it may end up being a more modest one. If you study the rises and falls in the value of Bitcoin, it’s not hard to know what is generally considered high and low values. Buy at a relatively low value and sit on the Bitcoins until the value reaches an acceptable selling cost. This way you are well placed to profit, although there are never any guarantees in cryptocurrencies.
Investment Trusts
There are bitcoin trusts, such as GBTC. Trusts who make investments in Bitcoin, do so on their customers’ behalf, taking all of the leg work out of trading. Using this method allows investors to trade without the knowledge or hassle of dealing with the cryptocurrency world.
Invest in Businesses that Accept it
OK, so this one is not technically a method for investing in Bitcoin directly. But, if we buy shares in a company that accepts Bitcoin as a payment method and is making a big deal out of this fact, then we are indirectly putting money into the Bitcoin industry. The very fact that such a company is forward-thinking enough to embrace new financial technology is a sign that they are looking at new and exciting ways of doing things
This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.