Financial freedom is what almost every being on earth seeks. It is what every investor, trader, employee, and business owner continues to strive for on a daily basis. Everyone wants to wake up knowing fully well that they don’t have to bother about money. We all want the freedom to do whatever we want anytime we want it. Financial freedom is achievable provided you know the right path to get there. One way to achieve financial stability is to invest or buy bitcoin and other cryptocurrencies. There are lots of other investment options including stocks, commodities, real estate, and many more.
Stocks, real estate, commodities, and bonds are the most ancient method utilized by people to grow their money but cryptocurrencies are now paving the way as new investment avenues. The first crypto asset, Bitcoin was birthed in 2009 when a group or an individual with the alias Satoshi Nakamoto successfully innovated the first decentralized cryptocurrency.
Lots of attempts have been made to design a digital currency in the 80s and 90s but failed due to one reason or the other. Bitcoin was designed to be a decentralized currency, a virtual currency you can use without the influence of an individual, group, government, or any other entity. One of the reasons it was created was due to a lack of trust in the third-party system and also in our financial system.
However, Bitcoin has evolved! Its usage has transformed from what we used to know. Bitcoin was formally only a digital currency, now, it is now used as a store of wealth and value, an investment portfolio where people can invest in and HODL to get an increase in their portfolio.
The question now is, “Is Bitcoin a good investment?”. To answer the question, we will examine what makes an investment a good investment, we will also compare bitcoin with traditional investments like stock, commodity, and real estate which are the most commonly used form of investment. Lastly, we will examine why everyone should buy bitcoin in Nigeria and of course, its disadvantages.
Is having little or no risk the prerequisite for a profitable investment? Or the tendency to generate massive profits on your investment without losing your initial capital?
Well, let’s find out the answers to these important questions.
In the meantime, you can also find out how to make money online passively with cryptocurrency.
What is a good investment?
As stated earlier the profits and risks associated with a certain investment determine its worthiness. It is almost impossible to find a low-risk investment that returns a high-profit margin within a short period of time. High profits come with high risk. Therefore, if you want an investment with minimal risk, you would have to settle for investments that will yield a small return. It all depends on you.
What do you define as a good investment? Is it something that will give you a high return in a short period or something that will give you a low return in a long period? You have to match your own risk with the associated risk of the asset before investing it. However, whatever you decide to do, try as much as possible to avoid Ponzi schemes. These schemes aren’t valid investments, they are just a way for someone to get rich off you.
Is Bitcoin a Good Investment?
Bitcoin is a non-perishable, valuable, and deflationary currency. It has value in itself which can’t depreciate over time. It is an asset people invest in during inflation to store the value of their local currency and possibly grow it. Bitcoin is arguably the most liquid asset presently with lots of affiliation around it, there are trading platforms, reliable exchanges like Remitano, and online brokerage. Bitcoin having high liquidity makes it a good investment.
Bitcoin yields a massive return on your investment within a short time, but due to its volatility, it is a high-risk investment. You can buy bitcoin today and before the end of tomorrow, you can have a gain or loss as high as 5% to 30%. Before you buy bitcoin in Nigeria, you need to carry out some technical and fundamental analysis, you need to have a plan on when to buy bitcoin and when not to buy it, so you can reduce the chance of losing any of your money on the investment.
There are very few investments that give you a return like that of Bitcoin and Altcoins. Investments like real estate can give you as high as 100% in a span of a year, two, or more with very low risk. Commodities like gold have high volatility which makes it also risky but not as risky as that of bitcoin, however, it is not also as liquid as bitcoin. Though both gold and Bitcoin are rare and have a baseline value, gold can be used for jewelry accessories and some other things and bitcoin can be used internationally as a medium of exchange.
Bitcoin investment is also quite similar to stock, the value of your money increases with the value of the assets. The two have high volatility. They can both make and break a millionaire; however, bitcoin has higher liquidity than stock.
Why you should invest in Bitcoin
- Bitcoin has high Liquidity.
- It has zero to little inflation risk.
- It is in its infant stage with lots of potential opportunities.
- Technological innovations are taking over the world and bitcoin is part of the innovation.
- You can trade it and earn interest on it.
- You don’t have to be an expert to invest in it.
- It is currently the most profitable asset on earth.
Disadvantages of investing in Bitcoin
- Bitcoin is highly volatile.
- You can lose everything if you misplace the private keys to your decentralized wallet.
Bitcoin is a millennial currency and investment. Although highly volatile, it is one of the few ways to make a lot of money in a short while. However, it’s advisable to always carry out adequate research to determine the perfect time to buy bitcoin. Also, don’t put all your eggs in one basket, invest in other assets. Lastly, invest only what you can afford to lose without much regret. Your investment is yours and you have to take full responsibility for it. Don’t allow greed, emotion, and FOMO to control your actions.