The most established and well-known of the current crop of digital currencies is Bitcoin. It is a cryptocurrency or digital currency, that has no official backing. As a result, it differs significantly from the US dollar and has special risks that, depending on your particular investment objectives, may make Bitcoin a good or disastrous investment.
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| What Could Happen If You Put $100 Into Bitcoin Right Now? |
Can I start by investing $100 in Bitcoin? you may be asking if this is your first time looking at cryptocurrencies. Without a doubt, the answer is yes. There are a few things concerning cryptocurrencies you should be aware of before making your initial investment, though. Here's a deeper look at what it might look like for both novice and experienced investors to invest $100 in Bitcoin today.
So, what exactly is Bitcoin?
Digital money that can only be found online is called bitcoin. But when you stop and think about it, a lot of the money you have now simply exists online. If you receive your payments by direct deposit, money may enter and exits your accounts without your ever touching a real dollar bill. In light of this, Bitcoin presents an entirely new perspective on money and is divisive due to some of the characteristics that also make it so intriguing (we'll get to that later).
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| What Could Happen If You Put $100 Into Bitcoin Right Now? |
By using the alias Satoshi Nakamoto, a mystery individual invented Bitcoin in 2009. Even though Nakamoto is recognized as the creator of money, no one person has power over it. Bitcoin, on the other hand, is a decentralized currency that runs through a global network of computers called cryptocurrency miners.
Bitcoin and other cryptocurrencies are supported by a system known as the blockchain.
Every participating miner machine and anybody else who wants to obtain a copy of the data themselves maintain a copy of a blockchain, which is a large database that is publicly owned.
This public database keeps an account of each and every Bitcoin transaction that has ever occurred. This record is very difficult to alter since there are copies on numerous computers in different places throughout the world.
The bitcoin market is open to everyone with an Internet connection. You may use a cryptocurrency wallet, such as one from Ledger, Trezor, or MetaMask, to purchase and store bitcoin. Through a central exchange like Coinbase or Gemini, you may also purchase and keep your money.
Even if purchasing bitcoin is quite simple, especially if you have experience investing in the stock market, not everyone should do so. It's advisable to stay away from investing more in Bitcoin and other cryptocurrencies than you can afford to lose. In the following part, we'll examine why in more detail.
How much is one Bitcoin?
Bitcoin's value fluctuates a lot, and a lot of that volatility may be attributed to the debate about its value. A single bitcoin was just worth a few pennies when it initially debuted in 2009, but at its height, it was worth almost $60,000. A single bitcoin is now worth roughly $30,000 at the time of writing.
Those figures show that early Bitcoin investors who stuck with the cryptocurrency through its ups and downs probably made a fortune. You could have easily made millions of dollars if you had invested $100 in bitcoin when it was only worth a few cents and kept it until it was worth more than $50,000 per unit.
Over time, the price of Bitcoin has fluctuated wildly. From the cryptocurrency price monitoring website CoinMarketCap, here is a 10-year price history.
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| What Could Happen If You Put $100 Into Bitcoin Right Now? |
However, the debate is sparked by the widespread criticism that Bitcoin and other cryptocurrencies are essentially worthless. Several prominent Wall Street CEOs, analysts, and government officials are among them. Eventually, if they are correct, Bitcoin's value will drop to zero or very near to it.
What is Bitcoin's actual value, considering that some fans predict its price will rise "to the moon" and others predict it will fall to zero? Unlike purchasing equities, it is currently impossible to determine the actual value of a bitcoin.
Supply of bitcoin is constrained. Only 21 million people will ever be produced (about 19 million exist as of June 2022). Similar to a digital version of gold, scarcity increases the value and makes it useful as a store of value online. However, if it turns out to be worthless, a significant investment in Bitcoin could be viewed as a grave error.
Can Novices Make Bitcoin Investments?
You might want to hold off on investing in Bitcoin for the time being and instead begin with the stock market if you are totally new to investing and have never purchased stocks, mutual funds, exchange-traded funds, or other sorts of assets, such as a retirement account via your employer. With its long history and more transparent techniques for determining an asset's worth, the stock market is far more established.
You can invest in Bitcoin, though, if you've had some prior investment expertise.
Purchasing bitcoin through a centralized exchange is comparable to purchasing shares via your preferred online stock exchange or the mobile app for your broker.
With most exchanges, you can open an account in little more than 10 minutes if you're familiar with computers and have your information close at hand. Then you may link your bank account, make a deposit, and fund your bitcoin exchange account for the first time in a matter of minutes. Even if your bank's money hasn't been processed yet, several exchanges let you buy bitcoin and other cryptocurrencies right now.
There is no harm in avoiding this particular asset class if all of that sounds overwhelming. But if you're enthusiastic about virtual money and think blockchain technology will play a significant role in the future of finance, you could decide that the risks associated with Bitcoin are well worth it.
The Potential Consequences of Investing in Bitcoin
A Bitcoin investment is by no means certain. You could have a successful outcome and make your money back tenfold or even more. However, your investment might decrease to nothing. Although I'd like to assume that the chances of winning in Bitcoin are greater than those in Las Vegas, many riskier cryptocurrencies resemble gambling.
Bitcoin is not supported by a sizable institution that ensures its value, unlike fiat money which is guaranteed by the government. I don't want to be a broken record, but it's crucial to realize that when purchasing bitcoin, you should only invest what you can afford to lose.
How Much Cash Is Required to Purchase Bitcoin?
Investing in Bitcoin is simple, but just include a little amount of it in your overall portfolio. It's not necessary to purchase a whole bitcoin at once. Bitcoin can be readily broken into smaller pieces, just like a dollar can be divided into pennies.
The majority of bitcoin exchanges let investors start out quite a little. When making a transaction, you might be able to buy as few as two, five, or $10 worth of bitcoin. Most centralized cryptocurrency exchanges make it simple to start with Bitcoin as only 5% of your investments if you have a $1000 portfolio.
Short version: You don't need a lot of cash to purchase Bitcoin. If you're anxious about making your first purchase, think about starting out with just $5. This lowers your risk and provides you some time to consider if it fits your financial objectives. If you enjoy the experience, you can always add to your first investment.
If I put $100 in bitcoin, how much would I have?
It's likely that early Bitcoin investors who sold at the top or even still hold their currency have experienced significant gains. You might become a billionaire if you invested in Bitcoin early, even in little sums.
Nine years ago, in July 2013, if you had invested $100 in bitcoin, you would have purchased 1.47 BTC. That was valued at roughly $101,500 at its height. What a fantastic gain! 1.47 BTC is now worth around 32,582 dollars. That represents a tremendous return on investment.
How to Purchase $100 in Bitcoin
Use a self-controlled digital currency wallet if you're committed to understanding how cryptocurrencies operate. However, a centralized cryptocurrency exchange is the simplest location to purchase and sell cryptocurrencies for anyone who doesn't consider themselves a tech freak.
Here are a few of the most reliable cryptocurrency exchanges that are accessible to traders and investors in the US:
Coinbase: In the US, Coinbase is one of the biggest and best-known bitcoin exchanges. It supports a lot of currencies and makes buying and selling simple, despite not having the lowest trading costs.
Gemini: A sizable bitcoin exchange with headquarters in the US is called Gemini. This exchange was established by the infamous Facebook Winklevoss brothers. The majority of cryptocurrencies you hold in your account with Gemini may generate interest, making it a legitimate cryptocurrency exchange with many features akin to those found in banks.
United States: Binance The branch of Binance that targets American traders is called the US. The world's biggest cryptocurrency exchange is by far Binance. Due to US securities laws, users' experiences in the US may not be completely comparable to those elsewhere in the globe. Despite these restrictions, Binance.US may be a viable home for your cryptocurrency because of its affordable price and availability of a wide range of currencies.
Kraken: Kraken is an exchange for cryptocurrencies that may be preferable for users with greater experience. A large selection of currencies, reasonable, competitive fees, and a great earning function are all provided by Kraken. With this option, you may earn hefty rewards for holding or staking a variety of currencies.
Robinhood: Robinhood provides commission-free cryptocurrency trading. Although it only supports a small number of cryptos, the low price is highly alluring. Also take note that you cannot withdraw cryptocurrency from Robinhood to an external wallet, despite the possibility that Robinhood's upcoming wallet product will include this capability.
Webull: Another commission-free trading software, Webull is designed for aggressive traders, and, depending on where you are, it can handle up to 41 different currencies. Although the low prices are appealing, you cannot remove your bitcoin assets from other wallets or accounts.
Public: This brokerage also began with equities before expanding to offer cryptocurrencies. 30 cryptocurrencies are supported by the public. Although there are no commissions, a charge of 1% to 2% is added to the trading price.
What Are the Fees to Purchase $100 in Bitcoin?
One of the biggest and most well-known exchanges is Coinbase, although transactions can be expensive. Trades made through the main platform are subject to a spread and a fixed cost per trade. Based on the magnitude of the deal, the charge changes. Anyone can upgrade to the less expensive active trading platform.
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| What Could Happen If You Put $100 Into Bitcoin Right Now? |
Trading cryptocurrencies with Robinhood Crypto is fee-free. Even if the number of supported currencies is less than that of other rivals, free transactions are still the best!
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| What Could Happen If You Put $100 Into Bitcoin Right Now? |
Can You Mine Bitcoin for $100?
I touched on the idea of currency mining earlier in this essay. Whether or whether you mine bitcoins, the process has a significant influence on cryptocurrency holders and anybody doing transactions on the Bitcoin blockchain.
Computers that mine bitcoins compete with one another to process and validate the following block of transactions. The word "blockchain" refers to a collection of transactions from the same period.
A miner is paid with transaction fees from recent users and freshly created bitcoin when they are the first to solve the challenging arithmetic required to process a new block of transactions. Due to Bitcoin's high value, several miners compete for that reward all around the world. Rewards will eventually be limited to only transaction fees after all of the bitcoin has been mined.
It is quite challenging for lone miners to generate any income on their own since there are so many miners competing for the same bitcoin payouts. You might need to invest in pricey computer hardware and possess the in-depth technical knowledge to get everything set up and running properly if you want to take part in bitcoin mining.
Some miners combine their resources and work together in a mining pool to boost their chances of obtaining a reward. But whether you mine independently or in a pool, these days it is doubtful that you will get wealthy from bitcoin mining. In fact, miners might end up paying more for the electricity that runs their computers than they do for the rewards they receive from mining. The majority of people will do their best purchasing bitcoin on their preferred cryptocurrency exchange.
Bitcoin Security and Safety
It's crucial to adhere to recommended internet security precautions if you decide to acquire bitcoin. On all financial websites, including bitcoin exchanges, banks, brokerages, credit card firms, and other lenders, this means employing a distinctive, challenging-to-guess password.
The exchange is unlikely to cover your losses if your cryptocurrency account is compromised because cryptocurrency is not FDIC-insured. You might wish to completely avoid cryptocurrencies if you lack confidence in using strong passwords and keeping your online account safe.
Knowing Additional Cryptocurrencies Besides Bitcoin
Naturally, Bitcoin isn't the only cryptocurrency that has garnered media attention in recent years. Just a handful of the more than 10,000 cryptocurrencies available today include Ethereum, Dogecoin, Shiba Inu, Stellar Lumens, Avalanche, Cardano, and Solana.
It's crucial to remember that Bitcoin and Ethereum are likely the most secure and reliable cryptocurrency projects available right now. Even greater risk and volatility are present in investments made outside of these key currencies.
Visit sites like CoinMarketCap and CoinGecko to find out more about other popular cryptocurrencies.
How to Assess Your Suitability for Bitcoin
The benefits and downsides of bitcoin are numerous. While it's exciting to imagine what may occur if you made an investment that increased tenfold or more, it's equally crucial to keep in mind the possibility of suffering substantial losses.
Diversification is a key idea that shrewd investors should follow. That can include expanding your portfolio to include Bitcoin and other cryptocurrencies. Before making a bigger, riskier investment, investing your first $100 in Bitcoin may be a good way to dip your toe into the cryptocurrency world if you've done your research, understand how it works, and still believe it makes sense for you.
