Technology progresses at exponential speeds and it transforms the world again and again. Since the dawn of the industrial revolution, we have seen countless technological revolutions that have changed the way we work and live. For the most part, our lives have become more convenient and comfortable due to this. As we venture further into the 21st century, technology will only get more sophisticated and advanced.
This also presents a huge opportunity for people to make unimaginable profits. Every few decades, a new industry emerges that generates a lot of wealth for a lot of people. The smartphone industry, the internet bubble, the transportation industry, have all managed to create millionaires and billionaires in the thousands. People just have to be sensible to make their investments wisely and timely. It can reap huge rewards for them, the likes of which they couldn’t have even dreamed of.
The world of cryptocurrencies presents the same profit-making potential right now. It is an industry that is just starting to get recognition. Most people aren’t even aware that it exists and of those people, only a handful actually own some stake in one of the cryptocurrencies. Also, the underlying technologies that drive crypto are still being worked on and being polished.
Bitcoin – The King of Crypto
Bitcoin is the first and most popular cryptocurrency in the world. It was created by an anonymous person or group of people in 2008. Since then, it has gone on wild price rides for more than a decade now. As is the case with most emerging assets, Bitcoin’s price is highly volatile. But in this particular case, Bitcoin’s fixed supply and ever-decreasing inflation cause it to keep increasing in price.
If you had invested $100 in Bitcoin in 2011 when it was worth $1 and sold all of it in December of 2017 when it was at its peak at $20,000, you would have made a profit of $2 million. All of that in just 6 years and without needing to do anything. If you’re thinking that you’ve missed the boat, that is not the case at all. The Bitcoin train is only now gaining speed and there is a lot of room to grow on the upside. Some estimates suggest that Bitcoin could increase to $100,000 in the upcoming bull cycle.
There are a lot of ways you can enter this industry and start investing in the future of money. You could decide to become a trader, you can become an investor or you can do both. One important thing you need to remember is that these different options come with their own caveats and you should only get involved up to a level where you are comfortable.
Profiting From Bitcoin
Let’s talk about becoming an investor first, as that is the easier option. If you have never owned a cryptocurrency before, you might need some getting used to. First of all, you will need to make an account on one of the exchanges and use your fiat money to buy some Bitcoin. You don’t have to buy a whole Bitcoin. You can buy it in fractions as well.
When prices dip a little, that is the best time to buy. You can also buy at fixed intervals which is technically known as dollar cost averaging. From there, you can choose to keep your coins on the exchange or transfer them to a hardware wallet. The latter is the recommended choice as funds are completely secure. When prices increase significantly from your point of purchase, you can sell them for fiat and make great profits.
The second option is to actively trade Bitcoins. There are many exchanges where you can open an account and start trading. Initially, you will need to convert fiat into Bitcoin but from there on, you could trade Bitcoin against a stablecoin of your choice. USDT (USD Tether) is the most popular option to trade against Bitcoin. As logic dictates, when prices rise, you sell and when they fall, you buy. In the process, you make profits. This is called spot trading.
Another option to earn some really great profits is to do leveraged trading. In this case, you open up an account on an exchange that allows leveraged trading. Then you deposit some Bitcoins into your account. From there, you can essentially borrow Bitcoins to trade at higher quantities that will give you much higher profits than spot trading.
But the most important thing you have to remember in this case is that leveraged trading is very risky. Bitcoin’s price is highly volatile, and you may, in fact, end up losing all the money you put in. So, if you choose this route, make sure to put in only the amount you are comfortable losing.
Since Bitcoin’s inception, there have been many people who have profited tremendously from its massive rise in price. A lot of these people have become public figures now. When Bitcoin was still young, it was a highly risky asset but these people believed in the future of digital money and have become millionaires already.
Charlie Shrem was one of the early investors in Bitcoin. He bought large quantities of it and today his investment (along with other investments) is worth $450 million. The Winklevoss twins, famously known for coming up with the idea of a Facebook-like site before Zuckerberg, saw Bitcoin’s potential and invested $11 million in it. Today, that investment along with investments in some bitcoin-based companies is worth $150 million.
Dave Carlson has to be the earliest of Bitcoin adopters. He started mining the coin in 2010 and his mining operations were yielding him $8 million per month at its peak. Erik Finman, who is now 20 years old, was known as a teenage Bitcoin millionaire. He first invested in the coin when he was just 12 years old. At the time Bitcoin was about a dollar in price. Today, he has 401 Bitcoins, worth a total of $3 million.