The price of Bitcoin has surged to record levels and seems like it's set to continue.
Bitcoin price at record highs
If you haven't already invested in Bitcoin, you've missed an amazing year that has seen a mind-boggling 600% increase in the price.
Between May 2020 and May 2021, the value of the world's most famous cryptocurrency has exploded from just under $10,000 to just under $60,000. In layman terms, that's an incredible 600% increase in value in just one year.
The good news is, it's set to continue growing in value according to all the Bitcoin news websites, buoyed by positive statements from big business and world-famous business executives, such as Elon Musk, Tesla and SpaceX owner.
If you haven't heard of cryptocurrency, it's time to pay attention, because this investment opportunity is for literally everyone, from the school leaver to champions of business and institutional investors. Literally, anyone can invest in cryptocurrencies.
This chart shows the meteoric rise in the value of bitcoin from May 2020 to May 2021 - a 600% increase. The all-time high for one BTC was £64,821. Experts predict it will reach and surpass that record by a huge margin.
What is Bitcoin?
Bitcoin is an innovative payment network and a new kind of money known as crypto currency. Bitcoin is the most well-known cryptocurrency because it was the first to successfully record transactions on a secure, decentralized blockchain-based network.
Satoshi Nakamoto is the name given to the pseudonymous creator of the world's most famous digital money, launched back in 2009. Bitcoin is the biggest name in this new sector because of the size of its market capitalization and the amount of data stored on its blockchain.
Things can get quite confusing when you start drilling down to the technology that powers Bitcoin such as 'Blockchain', 'Omni Layer', 'Lightning Network' and 'Liquid Network', so no point going there.
It's much easier to think of Bitcoin as if it is a stock to own, much like shares of companies you can buy on the stock market, however, this stock is also a currency, which means you can use it to pay for stuff. Increasingly, more and more businesses are starting to accept Bitcoin.
How much is Bitcoin worth?
At the time of writing this article, the price of a single coin was $58,186 (around £40,000). That sounds huge but crypto analysts and industry experts are speculating that the price of BTC could reach over $100,000, and even one day hit the lofty heights of $1m (yes a million dollars) per BTC.
If those analysts are to be believed, there is huge potential for growth well into the future, the only question is how long will it take to reach that astronomical value?
Why does the price keep rising?
The key thing to understand why the price of BTC keeps surging is that the supply is hard-capped at 21 million BTC, which means there can never be more than 21 million BTC in circulation. This provides the asset with a scarcity similar to gold, and that's why it has been commonly referred to as digital gold.
Is Bitcoin safe?
Some people are sceptical about the security of investing in Bitcoin because it is not controlled by the government or banks. The UK's most vocal money saving expert, Martin Lewis said on The Martin Lewis Money Show said 'Well, some people have lost money in their wallets. Like gold it can be stolen, and cryptocurrency is a bit like an equivalent to gold as it's a store of value of what people are putting in. You have to be very careful.'
Conversley, a lot of people do like the fact that BTC isn't controlled by old institutions. That's what makes it easy to buy and spend, and facilitates anonymous peer-to-peer payments. Aside from someone stealing your Bitcoin (very rare), it is very safe but you need to understand that it is an investment and investments can go up and they can go down.
How to buy Bitcoin
The first thing you need in place before you buy Bitcoin is a digital wallet where you will be able to store, receive and send bitcoin.
Crucially, in order to make sure your cryptocurrency isn't stolen or lost, you should create backups of your private keys and keep them somewhere very safe. If you lose your private keys or the USB you have saved them to are stolen or damaged, you will lose all the BTC associated with that private key and there is nothing you can do to get it back again.
Once you've set up your wallet, you're good to go and actually buy some BTC. There are a number of vendors online and very easy to find. You can make your purchase using credit/debit cards and some vendors accept Paypal.
You can buy as much or as little as you like - even just £100 worth to get you started.
How to make money with bitcoin?
The easiest way to make money with bitcoin is to invest in some, which involves buying a certain amount and hope the price rises. As it rises, some people like to bank profits and keep their principal investment in place and hope for more profits.
You can also trade in bitcoin. This is much riskier than simply buying some and watching it grow but it is far more lucrative if you do it right. To successfully make money trading with bitcoin you will need to watch the markets closely and sell when the price goes up and then buy again when it goes down.
If trading is something you would like to try, help is at hand. There are many trading platforms dedicated to cryptocurrencies and they used sophisticated algorithms to buy and sell at the right time to make your initial investment balloon into huge profits.
If you are going to trade or invest in cryptocurrencies, it's best to do so cautiously. Elon Musk recently said, 'Cryptocurrency is promising, but please invest with caution!'. He went on to say 'if you want to speculate and have some fun - there's a good chance that crypto is the future currency of Earth.'
Start small and be cautious.
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