The following is a guest post
All of a sudden, Bitcoin seems to be one of the hottest topics in investing. It’s not exactly new because it first emerged several years ago and has been gaining attention and influence ever since. But in the last 12 to 18 months people certainly seem to be starting to take it more seriously. Specifically, some are starting to address the idea of buying Bitcoin to fund retirement.
Whether or not this is a good idea isn’t a question you can answer by reading one article. Like most any other type of investment, buying Bitcoin carries some risk, and it shouldn’t be done lightly. But Bitcoin should be evaluated at least, given its growing significance both as a currency and a commodity. Given that, here are a few things you should know about it.
What Is It?
If you’re not sure about the answer to this question, don’t worry. A lot of people are still a little unclear on the details. Bitcoin is a complex concept, but not one that’s necessarily difficult to grasp. Basically, it’s a brand new currency that exists solely in digital form. There’s a finite amount of Bitcoin that can be generated (only 21 million), and it’s initially acquired via a mathematical “mining” process. But most people don’t really need to know about that part. What you need to know is that once it’s been mined, Bitcoin is out in the world and can be traded and stored as digital wealth. You can literally buy it with your own currency and use it to purchase goods and services at participating merchants. Or, if you wish, store it away on a safe digital platform as an investment to be sold later.
How Do You Buy & Store It?
We covered that you can buy and store Bitcoin, but how do you actually do it? There are several answers. Assuming you’re not mining Bitcoin on your own, you can buy it with your own money either through an online Bitcoin exchange or via a “BTM” which, as you might guess, is a Bitcoin ATM. There were once limited options for how and where to buy Bitcoin, but these days it’s fairly easy to find a convenient option. As for storage, part of understanding Bitcoin is to learn that technically, it isn’t stored anywhere. You don’t physically possess your Bitcoin. Rather, you’re storing secure digital keys, which allow you to access your stash and sign off on transactions using it. You can store these keys on desktop or mobile apps, as well as via online wallets.
How Much Is It Worth?
Naturally this question doesn’t have a concrete answer, as the value of any sort of currency fluctuates, sometimes on a minute-to-minute basis. You can monitor the price, however, and at the time of this writing it’s worth a little over $4,000, which is fairly close to its all-time high. However, you don’t need to spend $4,000 to acquire a Bitcoin if you’re interested in investing. You can buy fractions of these coins as well. It’s almost worth thinking about it as buying a quantity of Bitcoin, rather than a number of Bitcoins.
Is It A Wise Investment?
This is the big question, and it’s one no one can answer for you. What we can say is that it is a form of investment, with more and more people treating it like a valuable commodity rather than a usable currency (though it is still the latter as well). As for whether or not it’s wise, projections and predictions are split. Lately, Bitcoin has performed extraordinarily well, soaring to highs many once believed were impossible. Some see this as the beginning of a sustained period of growth en route to Bitcoin becoming a truly mainstream alternative currency. Others, however, see a bubble bursting and still believe that Bitcoin will flounder once early investors decide they’ve gotten enough out of it and sell off.
At the very least, it’s something worth looking into if you’re hoping to diversify your retirement fund. However, you should approach Bitcoin with care and with an eye toward further educating yourself on the subject, as with any other investment.