Investing in Bitcoin for 2018
With all the buzz it’s created lately, it’s hard to believe there was ever a time before Bitcoin. But that time wasn’t all that long ago. Before 2009, Bitcoin didn’t exist. When the digital currency first launched, you could buy just over 1,300 Bitcoins for $1.
To say things have changed might be a bit of understatement. Today, Bitcoin is one of the most well-known cryptocurrencies in the world. It’s also worth a lot more than that it was back in the early days. For example, in 2010, the following transaction involving Bitcoin took place:
A person bought two pizzas, worth $25, with 10,000 Bitcoins. In 2018, those 10,000 Bitcoins would be worth well over $100 million.
The current value of Bitcoin has many wondering if it has hit a peak and is still worth exploring in 2018. Some say there is still plenty of room for Bitcoin to grow, while others point to newer cryptocurrencies on the market as the wave of the future. If you’re considering Bitcoin investing in 2018, here’s what you need to know about how bitcoins work and the rest of the cryptocurrency world.
The Best Time to Invest in 2018
When investing in Bitcoin, is there ever a time that’s better than others? Should you invest at the beginning of 2018, wait until the middle of the year or hold off until the end of the year? To figure that out, it helps to understand Bitcoin investment and the fundamentals of investing in general.
First things first:
It’s essential to understand that there are no guarantees with Bitcoin or with any other type of digital currency, whether you are putting your money in the stock market, another kind of currency or Beanie Babies. The value and price of an investment can continue to increase so long as demand increases. But then, a sudden change in the market — such as panic about the volatility of the currency — a new war or just people feeling down about things — can mean the price of your investment falls. Falling investment prices typically cause people to sell off their coins, causing prices to drop even further.
All of this is to say you can’t predict what Bitcoin will do over the coming months. Already in its nine years of existence, it’s seen its fair share of ups and downs. All the following bitcoin prices are listed in USD:
- October 2009: 1 Bitcoin = 0.008 cents
- July 2010: 1 Bitcoin = 0.08 cents
- February 2011: 1 Bitcoin = $1
- June 2011: 1 Bitcoin = $13
- March 2012: 1 Bitcoin = $4.92
- April 2013: 1 Bitcoin = $181.66
- November 2013: 1 Bitcoin = $685.75
- December 2013: 1 Bitcoin = $1,022.37
- February 2014: 1 Bitcoin = $547.09
- December 2014: 1 Bitcoin = $313.08
- June 2015: 1 Bitcoin = $226.90
- January 2016: 1 Bitcoin = $431.76
- November 2016: 1 Bitcoin = $726.36
- March 2017: 1 Bitcoin = $1,201.86
- August 2017: 1 Bitcoin = $2,787.85
- November 2017: 1 Bitcoin = $10,000
- December 2017: 1 Bitcoin = $19,500
- January 2018: 1 Bitcoin = $10,926
Some might look at the $19,500 price for Bitcoin from December 2017, compare it to the much lower $10,926 current value and believe the cryptocurrency has peaked. Others think there’s still a way to go. One analyst predicts the price of Bitcoin will climb to $100,000 before the end of 2018, only fall back to $1,000 per coin by the start of 2019.
If that analyst’s predictions are correct, that means you could earn a fair amount from an investment today, but could also risk losing a fair amount if you don’t end up selling off your coins before the price falls again.
One piece of advice that can be worth following when it comes to figuring out when to buy Bitcoin in 2018 is to look for, and then buy during, “the dip.” A dip is right after the price of Bitcoin falls. It might continue to fall at that point, but since you have no way of knowing when it will bottom out, it can be tricky to try and get that timing just right. It’s often recommended that you buy when the value is falling. Given the currency’s history so far, people who bought on the dip often saw a return on their investment.
What Are the Best Investing Rules in 2018?
Since it’s difficult, if not impossible, to pinpoint an exact time to buy Bitcoin, it helps to have a few ground rules for yourself. These rules can tell you what to know about investing in Bitcoin.
Rule 1: Don’t put all your eggs in one basket.
Judging by the performance of Bitcoin accounts and other cryptocurrencies so far, there is a potential for considerable gains. But, as with any investment, there’s also a potential for loss. It can be easy to get wrapped up in the excitement of cryptocurrencies, look at the rosier analyst predictions and come to the conclusion that you’ll make your fortune by investing now.
But you don’t want to move all your assets into Bitcoin. It’s better to invest a little bit, such as no more than five percent of your total assets, and likely even less if you don’t have that much. See how things go from there. Based on the performance of Bitcoin, even a small investment can pay off big-time. For example, one man invested $27 in Bitcoin at the beginning by buying 5,000 coins. He left his investment alone and then forgot about it. Then, in 2013, he realized his $27 investment had grown to $886,000.
Rule 2: Work with a reputable exchange.
There are lots of thieves and hackers out there who would love to get their hands on your Bitcoins. To protect yourself and your investment, do your research before you invest. If the exchange is promising an impressive return on investments or guarantees you’re guaranteed to make a certain amount by buying Bitcoin, consider that a red flag. There are simply no guarantees with Bitcoin, and any company that makes grand promises probably can’t live up to them.
Rule 3: Don’t panic.
It’s probably best not to keep tabs on the value of your Bitcoins on a day-to-day basis. That’s because the cost can go up and down regularly, often without explanation. In reality, the value of the currency can swing up and down by as much as 30 percent over the course of a day. If you decide to sell the minute you see the bitcoin price dip, you might end up missing out on a good long-term investment.
Rule 4: Put your Bitcoin in a wallet.
Although Bitcoin is a form of cryptocurrency, it has to “live” somewhere. For many owners of Bitcoin, the most secure place to keep their coins is in a Bitcoin wallet. A Bitcoin wallet can take one of several forms. It can be a software program that keeps your coins safe and secure on your desktop or mobile device. It can be a piece of hardware that contains the information you need to access your Bitcoins.
Your Bitcoin wallet can also be a bit old-school and come in the form of a piece of paper with relevant information written on it. Quaint as it might sound, a paper Bitcoin wallet can be the most secure way to stash your coins — as long as you keep it in a safe place and don’t let anyone else look at it.
Bitcoin Technology: What to Know About the Public Ledger
All this talk about software and hardware and paper Bitcoin wallets, of all things, might have you scratching your head. If you’re feeling confused about why Bitcoin accounts are so talked-about in 2018 or where the cryptocurrency even came from, it helps to go back to the beginning and explore where Bitcoin originated and how it works.
Although people often talk about Bitcoin as being a super-private currency — useful for when you want to buy something without anyone else knowing about it — every Bitcoin transaction is recorded on a public ledger. Since the ledger is public, anyone can peek at it and see who’s trading what. The thing is, your identifying information isn’t going to be attached to the ledger. Instead, every transaction you make with Bitcoin is accompanied by your “signature” — a string of letters and numbers.
So even though another person can see that a Bitcoin transaction took place, he or she won’t necessarily be able to identify the people or parties involved.
Bitcoin uses a public ledger, or blockchain, because it is an entirely decentralized, unregulated form of digital currency. Since the ledger records every single transaction and is accessible to all, there is no need for a centralized Bitcoin bank.
Another key feature of the public ledger is that there is no way to alter it. This means that once a Bitcoin transaction has taken place, you can’t go back and reverse it. That can be good news if you receive coins and don’t want the sender to take back his or her Bitcoin. But it can also be bad news if a hacker gets access to your private key — the password you use to spend Bitcoin — and uses it to withdraw Bitcoin from an exchange or make purchases using your coins.
Reasons Why Bitcoin Has High Growth Investment Potential in 2018
Why Bitcoin in 2018? If you’re wondering why analysts are predicting bitcoin trends will continue to gain, or why this year is predicted to be a big year for Bitcoin, these reasons will help improve your understanding of Bitcoin and its potential for high growth in 2018.
It will become more useful.
In the earliest days of Bitcoin, people bought and sold it, but the currency wasn’t used to make everyday purchases. Slowly but surely, Bitcoin is achieving adoption as a form of payment. For example, at the start of the year, more than a quarter of a million establishments in Japan began to accept Bitcoin as payment. Before that, there were more than 100,000 establishments around the world that took Bitcoin.
The more useful and usable Bitcoin becomes, the more people will purchase and use it, driving demand up.
More and more cryptocurrencies are flooding the market.
Bitcoin isn’t the only cryptocurrency out there. Alternatives — such as Ethereum and Aureus — are beginning to gain popularity. Although more competition might seem to detract from Bitcoin or adversely affect its value, the opposite is likely to be true. Healthy competition suggests that there is demand for a product, which is likely to help increase the growth potential of Bitcoin and other cryptocurrencies this year.
More people will use it.
Initially, you had to have a bit of technical know-how and computer-savviness to purchase and trade Bitcoin. That’s not so much the case today, though, as there are numerous exchanges out there that make it easier than ever to buy and sell the cryptocurrency. The more accessible Bitcoin becomes, the more people will feel comfortable purchasing it.
Institutions are getting interested.
Bitcoin hasn’t just caught the attention of individuals, either. It’s also beginning to grab the attention of financial institutions. Plans are underway to introduce retirement plans that offer Bitcoin as an asset. Exchange-traded funds (ETFs) and other stock options for Bitcoin, regulated by the Securities and Exchange Commission (SEC), are expected to get underway this year, too.
As more options for Bitcoin become available, and as more and more financial institutions begin to see it as a serious asset, its popularity and potential value should grow.
Four Bitcoin Questions for 2018
Although investing in Bitcoin is expected to continue to grow this year, several questions remain about the potential and future of the cryptocurrency.
1. Will another digital currency unseat Bitcoin?
Bitcoin isn’t the only cryptocurrency out there, although it might be the best-known. Its volatility has some people wondering if another cryptocurrency might become more popular or might prove to be a better investment as the year goes on. Some point to Ethereum as a potential usurper to Bitcoin’s throne, as it is less subject to dramatic price fluctuations.
It all remains to be seen, though. It could even turn out that an entirely new currency comes out that upends the market.
2. What effect will Wall Street have on Bitcoin?
You could argue that the sharks are starting to circle around Bitcoin. Until now, Bitcoin stock has been unregulated and not part of the traditional stock market. But the introduction of a Bitcoin ETF, which would be listed on the New York Stock Exchange, will change that. Given that trust in Wall Street has fallen considerably since the recession, it remains to be seen whether Bitcoin’s introduction to the stock exchange will help or hinder it.
3. What happens if Bitcoin Stock crashes again?
Naysayers love to say the end is nigh for Bitcoin, even though the cryptocurrency has shown again and again that it can bounce back after a drop or a crash. But that still has some wondering if the next big Bitcoin crash will be the one that ends it all.
4. Will Bitcoin see widespread adoption?
Making Bitcoin easier to buy, sell and use is likely to have a positive effect on its popularity. Whether that translates to more and more “regular folks” jumping on the Bitcoin and cryptocurrency bandwagon is still uncertain, however.
Explore Your Options With Aureus
Do you think the future looks bright for Bitcoin and other forms of cryptocurrency? If you are ready to give cryptocurrency a try, sign up for Aureus today. Aureus is the first cryptocurrency backed by a Bitcoin reserve and which pays monthly dividends in the form of Bitcoin. You can even use Aureus to make payments in real life, such as for groceries or your rent.
Learn more by checking out the answers to FAQs about Aureus.