Buying Bitcoins via the internet
Buying bitcoins can be very lucrative! The price of the bitcoin fluctuates strongly which means that you can achieve very high profits. Of course you have to enter at the right time; after all, those fluctuations can also go the wrong way. In this article you can read everything about the Bitcoin so you can take full advantage of this special hype!
Buy Bitcoins through CFDs
The first way you can buy bitcoins is to trade CFDs on a bitcoin. This is actually the easiest way to trade in bitcoins. After all, you can profit from the price fluctuations on the bitcoin without needing any technical knowledge. You do this easily by means of a so-called broker. The advantages of trading bitcoins at a broker are therefore clear:
- You can go short on the price of the bitcoin; you speculate on a price drop.
- You can use leverage which means that you need less money.
- Furthermore, you can practice as much as you like using a demo.
- You can take advantage of currency fluctuations in the short term.
The best way to trade in bitcoins
Plus500 is one of the best providers for trading in bitcoins. With Plus500 you can try out the possibilities without any risk by means of a demo. It is also possible to benefit from a possible decrease in the price of the bitcoin; this can be done by going short on the bitcoin. Creating an account with Plus500 is completely free, and it is possible to buy or sell your first CFD bitcoins. Click here to open a free account with Plus500 >>
Physically buying Bitcoins with a wallet
It is also possible to buy bitcoins physically in the long term. The bitcoins are then placed in a so-called offline or online wallet. Physically buying bitcoins is possible with various suppliers. These suppliers act as a so-called exchange. Buying bitcoins can usually be done via iDEAL, after which the bitcoins are credited to your wallet.
However, it is important to mention that this way of buying bitcoins is more expensive. If you want to speculate on the price of the bitcoin, it is better to make use of a broker. The direct buying of bitcoins is especially advisable when you really have a long-term vision. Buying bitcoins will easily cost several percent in transaction costs.
The basics: what are bitcoins anyway?
Let us once again deal with the essence of the bitcoin. The bitcoin is a so-called cryptocurrency; a digital currency. The special thing about the bitcoin is that the currency is completely independent. There is no central party that controls the value of bitcoins. Nor is there any government that has a grip on the bitcoin. Obviously, the bitcoin has the necessary advantages. If this were not the case, the currency would not be getting so much attention. But what are the biggest advantages of the bitcoin?
- Simple: paying with the bitcoin is easy and is possible with more and more companies.
- Cheap: making payments without intermediate payment systems is cheaper.
- No borders: you can easily pay abroad with bitcoins.
- Fast transactions: within minutes, anywhere in the world!
- Limited number: there are a limited number of bitcoins; therefore there will never be a devaluation.
- Privacy: a bitcoin transaction can be carried out completely anonymously.
- Safety: make payments without your data being misused.
What is a good investment strategy
Although bitcoins have many advantages, bitcoins are also often used as an investment. By buying and selling bitcoins in the right way, you can achieve a good return. Here we discuss the two strategies you can use to make a profit by buying and selling bitcoins.
Speculate with bitcoins
When you speculate on the bitcoin, you buy or sell the currency to gain profit in the short term. As an investor, you can choose from two different options:
- Buy Bitcoins: you buy bitcoins to make a profit if there is an increase in the price.
- Selling Bitcoins: you sell bitcoins to make a profit in the event of a price decrease.
The advantage of speculation in the shorter term is the fact that you can make a profit regardless of the direction of the price. You can even earn a lot of money when there is bad news; you simply go short by selling bitcoins at a broker. Every pound the bitcoin drops in price is profit for you.
If you start speculating on the bitcoin, you have to time the buying moment carefully. You do this mainly by studying the masses. The bitcoin is mainly owned by private investors who do not always make rational decisions. As a result, the price reacts extremely to news about the digital currency.
Besides the news, you should also study the price range. There are often predictable patterns within the price pattern of a security. Also in the bitcoin, price movements from the past provide information about price movements in the present. For example, if you know how much the price moves on average in one day, the general trend and the maximum price ever reached, this information can all be used for putting together a good strategy.
Finally, it is important to always use a stop loss. This is the moment when the position closes automatically. By using a stop loss, you avoid losing a large part of your assets because the price suddenly falls.
You can best speculate in bitcoins at Plus500. Click here to open a free account>>
Bitcoins in the long term
Another possible strategy is buying bitcoins for the long term. This strategy is fairly simple; you simply buy the bitcoin and then leave it for a longer period of time. Although this strategy seems lazy, timing continues to play an important role. Perhaps the role of timing when buying bitcoins in the long term is even more important than the role of timing when buying bitcoins in the short term.
This is because you have the possibility to sell the bitcoins in the meantime. Obviously, you cannot easily do this when you buy bitcoins in the long term. In this case, you have to deal with higher transaction costs, so it is not profitable to sell the bitcoins several times a day. It is therefore important to study the graph carefully so that you can decide what is the right time to buy a number of bitcoins in the long term.
Reasons why you should perhaps buy bitcoins
Investments of many companies
Clearly, the cryptocurrency is booming. There are more and more companies investing money in, among other things, the bitcoin. This will increase the importance of the bitcoin so that all kinds of new possibilities and applications for this special currency are designed.
This naturally increases demand; when there are more opportunities to use bitcoins, the demand will increase further. The number of stores where you can pay with the bitcoin has increased significantly. For example, with Thuisbezorgd it is already possible to pay for your pizza with a bitcoin.
It is a safe haven
Many people are buying bitcoins for the same reason they used to buy gold. Precisely because the bitcoin is independent of governments and central banks, it is seen as a stable, safe haven in times of political unrest. It is therefore quite possible that the price of bitcoins will increase further during economic downturns. This might be a perfect time to buy bitcoins.
You are responsible
If a bank is robbed, you can lose part of your money. This is not the case with the bitcoin. With bitcoins you are responsible for the storage of this currency. You can do this yourself for example using a well-secure wallet. It is precisely because you yourself are responsible that you do not have to worry about banks making a big mistake that will make you lose your money. This may be another reason why the price of the bitcoin may rise further in economically uncertain times.
Avoiding transaction costs
When you go abroad, you pay transaction costs when exchanging currency. With bitcoins this does not have to be the case! After all, you pay in each country with the same bitcoins. In the future bitcoins may become more popular among tourists, which could contribute to the further price increase of the bitcoin. This can therefore be a good reason to buy more bitcoins.
Bitcoins provide more privacy
Bitcoins are not directly connected to a person. Where bank accounts are always related to a specific person, this is not the case with bitcoins. This makes it possible to carry out transactions completely anonymously and to keep deposits by using bitcoins. This may be a good reason why the price of the bitcoin continues to rise so strongly.
Be careful with bitcoins
Yet it is important to emphasize that you have to be careful when buying bitcoins. The price of the bitcoin is extremely volatile and investments in the bitcoin therefore require nerves of steel. You can earn a lot of money with a good investment in the bitcoin, but you can just as easily lose a huge amount. Therefore, always pay attention when buying and selling bitcoins and make sure that you only bet money that you can actually lose.