Are There Any Good Ways To Buy Bitcoin In 2022?
Elon Musk and Mark Cuban are making a lot of money with Bitcoin because of stories you’ve read. You’ve seen ads for companies that say they can help you buy it safely and efficiently. You might even know a few people who have tried it. Cryptocurrency is becoming more and more critical to people’s long-term investment plans, despite the frenzied headlines and its reputation as the Wild West of the money market.
In a new survey by Wealthramp, more than one in five investors with assets between $250K and $2.5M+ said they had 6 percent or less of their total investments in Bitcoin and other crypto assets, but not more than 10%. This is even better for Millennials, who own up to 10% of digital currencies.
It would be helpful if you thought about why you need to invest in crypto before jumping on the crypto bandwagon and joining in on the fun. Some people buy Bitcoin to make a statement about something they think is important to them. Or maybe you think you can make a lot of money if you buy it now. A big reason to own cryptocurrencies is that they are new and exciting investments.
As a crypto dabbler, you might want to get your feet wet and see if you like it. The first stage is to open an account on an online crypto exchange. You can fund it with “fun money” you can afford to lose. If you’re serious about investing in crypto, you’ll want to learn more about what makes it different.
How does Bitcoin function?
They are confirmed in the same way that a picture or video is accurate. It’s true that they only exist in the virtual world. But then again, so does this piece.
Cryptocurrency has two things that make it different from other types of money.
Because it takes a lot of computing power to make crypto, there is only a limited amount for people to buy. The more people want to get a piece of the crypto pie, the higher the price. It’s not “backed” by the full faith and credit of a government. That’s why it has a lot of appeal to people who don’t like government rules. As a result, there aren’t any formal protections for people who buy things.
In many methods, investing in crypto is like investing in baseball cards or Beanie Babies because their value only changes based on how people feel. While some cryptos have value because of the transactions they allow, most price changes are caused by supply and demand; as with most investments, those who get in and out first tend to make the most money.
Bitcoin isn’t just a digital Ponzi scheme. It’s also a lot more than that! The “blockchain” is what this is. Blockchain is a new open-source technology that records every cryptocurrency transaction in a way that can’t be changed or deleted. As soon as you buy Bitcoin, it will be written down on the “blockchain.” As more people use the blockchain for everyday transactions, bitcoin and other cryptos are more likely to play a role in these exchanges as monetary tokens.
Is it safe to purchase Bitcoin?
Even though you can use Robinhood and other apps to trade crypto directly, established discount brokers like Fidelity and Schwab don’t let you do it. You can only install in crypto futures or ETFs that invest in crypto futures with them.
This is how most people buy and sell crypto today. Crypto exchanges like Coinbase allow people to buy and sell crypto directly. So, it’s essential to know that, unlike banks and brokers, currency exchanges aren’t legally required to return all the crypto stolen from your account. Most do, however, have crime insurance to protect a portion of the digital assets they store.
There were 122 attacks on crypto in 2020 alone that took $3.8 billion. A third of them were aimed at people who use blockchain. More than 6,000 Coinbase accounts were hacked between March and May of 2021. Dozens of crypto exchanges that were hacked and lost everything to cyber theft and embezzlement have gone out of business worldwide, leaving their customers with little or no money.
Is your crypto strategy a sideways stock market hedge or an inflation hedge?
Make sure you know how even a small amount of crypto could change your overall investment plan. However, even though it adds some level of diversification outside of stocks and bonds, it is not a risk-reduction tool. Why? You don’t have to be a businessman or a geopolitician to understand why its prices can change so dramatically. You have to be afraid and greedy.
As soon as you decide to add it, how do you choose from all of them? As with stocks or bonds, there isn’t any formal research to help you figure out which digital currency gives you the best “bang for your buck.” Suppose you want to invest in crypto for the long term. In that case, you might want to work with a qualified fee-only fiduciary financial adviser with a lot of experience with digital currencies.
Adviser: They’ll have access to research that makes evaluating cryptos more than a wild guess. They’ll also be able to use sophisticated financial modeling tools to show how cryptos might affect your portfolio in different return scenarios in the long run.
There are a few other models here, but keep in mind that none of them can predict how things will turn out in the future. Most financial advisers who know about crypto say that it should only make up 5% of your portfolio if you want to invest in crypto. When it comes to investing, that’s only true if you’re willing to take some risks and have a long-term goal of 20 years or more.
The cryptocurrency future in 2022 and beyond
Cryptocurrency isn’t regulated by the SEC or FINRA, so advisers can’t use institutional brokerage and custodial platforms to buy and hold it for you. That’s why most only give clients advice on buying crypto independently. On the other hand, Fee-only financial advisers are testing out the first generation of apps that let them buy and manage crypto for their clients.
As soon as the SEC and FINRA agree on the rules for investing in crypto, we should see many people rush to add crypto trading to their platforms. This is very crucial because the main jobs of advisers will be to keep an eye on crypto prices and rebalance portfolios when crypto allocations get out of their target ranges.