Bitcoin has become a popular investment asset proving disbelievers who thought that this blockchain-based digital currency was a fad wrong. The cryptocurrency has created a lot of interest even from people who had never heard about bitcoin before. Most interestingly bitcoin is a good avenue of creating money as there are various ways of making money.
Ways of making money with bitcoin
There are several ways one can make money with bitcoin but the most obvious ways are through investing and CFD trading. When trading on exchanges it is important not to keep your bitcoins on the exchange wallet but rather in hardware wallets such as Trezor and Ledger Nano S where they will be secure.
1. Investing in Bitcoin
Bitcoin has over the past few years emerged as an investment asset although it is still not so popular as bonds and stocks. There are various ways you can invest in bitcoin and the most common method is buying bitcoins and holding them until their price rises before you sell them to earn a profit. Investors can benefit from the high volatility of bitcoin stock price today and several investors have gained significantly from the volatility. You can trade bitcoin on various exchanges with Coinbase being the most popular exchange for bitcoin.
Also Read: What Is Bitcoin And Why Is It So Attractive For Traders?
Besides buying and selling bitcoin you could also invest in startups blockchain development or even stocks. Investing in startups in the cryptocurrency industry can make you some money. Firms dealing with bitcoin projects could be good investment options.
2. Trading Bitcoin as a contract for difference (CFDs)
Trading bitcoin as a CFD is one of the other ways to deal with bitcoin. A CFD is an instrument that enables you to trade a contract based on its current market price which will be bitcoin in this case. However, unlike conventional investments CFDs don’t involve the purchasing of the asset they are mirroring.
It involves opening a position on the movement of bitcoin price with a broker. The leverage rates of CFDs are high which means the losses and gains could be higher relative to conventional investments. If leveraged well bitcoin CFDs can make you good money but the risky is high.
Determinants of bitcoin price movements
Bitcoin prices are highly volatile making it an attractive investment opportunity but at the same time, it is a risky market to predict. Prices can suddenly change any time because of the following reasons
Public perception-bad press can greatly affect bitcoin significantly because the value, security, and longevity of the coin are always up for debate.
The market capitalization of bitcoin – The market cap influences the price of bitcoin which can determine if traders can get in on an upswing or short a bubble.
Supply of Bitcoin– by 2040 around 21 million bitcoins will have been mined but availability depends on how their entry to the market which can influence the price.
Major events– Key events such as security breaches, regulatory changes, and macroeconomic impediments among others can impact bitcoin prices.
Merry Markets is the home of free financial news and analysis on Forex, Stocks and cryptocurrencies. Check out our latest trading guides on best bitcoin trading brokers, Top FX Trading Brokers, and Spread Betting Brokers. Follow our reviews on Easy Markets Website, Etoro Website and City Index Forex Trading broker.
