Investor's bitcoin

This post is about how to become a millionaire? Oh God, I'm just joking! From this post I will make sure to turn on the light bulb on your heads, so that you people understand the power of the bitcoin and how to harness that power to decide your financial future. As always we will start with why.

Why bitcoin as an investment:

So before we jump into the topic. First of all, what is an investment? In simple terms, the strategy of money making money is so called investment. For instance, you have made a fixed deposit of 1 lakh for 5 years. After 5 years, you got 1 lakh 30 thousand as returns(just an example). So here, money - 1 lakh making money - 30 thousand is an investment.

Let us assume you people are dreaming and in your dream, you have invested 40 rupees in your piggy bank and fast forward, after 11 years you got around 30 lakh rupees in return. This could happen only in dream? What if I say it is a reality. Would you people believe me?

Let me bring you people back to reality. Let us investigate, before making a decision to believe me or not. Back in 2010, the time when bitcoin just got the grip and started trading, its value was just about 0.83 USD or 37.9559 INR (at the time 1 USD = 45.73 INR, USD stands for US Dollar and INR for Indian Rupee). Now in 2021, the value of the bitcoin was 38,983 USD or 31 lakh INR (3.1 million rupees) approx. So back in 2010, if you people have invested just 38 rupees in bitcoin, now you would be holding 30 lakh rupees, that is the power of bitcoin investment and that's why I made this post for you people so that you won't be missing out this life changing opportunity and don't regret later in future. So what you people decided? believe me or not? Also I cracked a joke at the start of the post. So you people now feel like this post is about how to become a millionaire? may be, as per our wish, if one day you happened to be a millionaire, don't forget to thank me!

By this time, we would have got some questions in our great minds. What is the possibility that bitcoin stays the same as the past and keeps growing? or What if it fades away in the future? Let me show you some signs why the bitcoin has a future. Few years ago bitcoin was not so famous and today we all are talking about it. Earlier, neither the organizations nor the government acknowledged bitcoin, but in the recent times as you have noticed, not only its early adopters such as Microsoft and PayPal there are few other organizations such as Overstock, Whole foods, Etsy etc. and few Indian companies like HighKart, Purse, Sapna and the Rug Republic accepts the bitcoin payments. Also, I will be surprised if you people say that, you have not heard about Elon Musk's tweet about his organization - Tesla buying 1.5 billion dollars worth of bitcoin. Not only the organizations but several governments like US, Canada, Australia, European Union and Finland acknowledged bitcoin and enacted few regulations for its usage and some countries like India are on their way. One step ahead El Salvador, the Central American country, even agreed bitcoin as a legal tender. So you people think, these organizations and governments spending their time and energy for something (bitcoin) that has no future scope. I don't think so. But then, the decision is yours.

So you people think, why am I waiting, let's go straight away pull all our bank savings and invest them in bitcoin. No that's a very bad idea and you may end up losing everything. To become an insightful bitcoin investor and in order to make wise decisions such as what is the percentage of my portfolio that I'm going to allocate for bitcoin? and how will I handle the situation if I lose it? and how long I'm going to hold it? etc., let us assess its risk factors and be aware of its downsides.

1. Volatility: Bitcoins are so much volatile in nature, means their values are vigorously fluctuating. See the chart below.

So let's say you have invested heavily in bitcoin and due to its volatility, its value may go deep down to the hell and you will feel heart broke. Also, you will be in a heart wrenching state, if you want to liquidate it at that time. Let us evaluate this risk with the help of an example. Let's say you have invested 5 lakh rupees in bitcoin and after 3 months, you are in a urgent need for money but as we know due to its volatile nature the values may went down to 1 Lakh rupees, will you be liquidating? It's a daunting situation for any one out there and nobody wants to put their legs in these kind of shoes.

2. Dependency on an exchange: Though bitcoin is decentralized. The medium through which you can invest are centralized i.e. the crypto exchanges such as Coinbase, WazirX etc. where you will be investing your money on bitcoin. These exchanges have to abide by the rules and regulations of the government. What if the government bans these exchanges? that will be an havoc.

3. Dependency on the miners: As we all knew the bitcoins are reliant on miners. So what if the miners lose interest in bitcoin? or what if a big country like China who has a lot of miners in their country enforce not to mine bitcoins. If such a situation arises, bitcoin value may drastically go down. Hope this will not happen as the chances of mining population of bitcoin going down is negligible, but there is always a risk.

Also there were few other risks that what if the country bans the bitcoin. What if people loses the trust over the bitcoin and we can add on questions like these. But always remember everything comes with an risk - travelling in an airplane, adventurous rides in theme parks, over speeding in bikes, even eating processed foods. Everyday we are overcoming the risks to satisfy our needs. And we have few protection gears as well to safeguard us from these risk. Similarly, bitcoin investment also comes with its own risks, so in order to mitigate the risks and harness its power, you should work on your own strategy of investment. Though, I will provide some pointers like Invest only the money you could afford to lose and hold it for a long time. These are like the protections gears when it comes to investing in bitcoins

How to invest in bitcoin:

So you people finally decided to invest in bitcoin? then your next question will be how to do it? The process of investing in bitcoin is fairly simple. There are many crypto currency exchanges in India like WazirX, Unocoin, CoinDCX Go etc., where you can invest in bitcoin. Choose one of them as per your choice and complete the KYC process, which will usually takes around 5 to 10 mins and that's it you are on your way to make wonders. I personally use WazirX, as of now it is one of the best crypto-currency exchanges in India with 4.2 star rating and over 50L+ downloads in play store. I will leave the link in the comment section below. If you wish you can check it out. Also you people will have a question, one bitcoin is around 30 Lakhs and how could I invest in it? but luckily, we can buy it in fractions as well like 0.0009 and you can invest in bitcoin even as minimum as 100 rupees.

I strongly believe in the quote "You people are creators of your own destiny" so make decisions wisely and if you are about to start your journey of investing in bitcoin then always remember the mantra "Invest the money you afford to lose". Also before investing, if you want to know what is a bitcoin and how it operates, do check my previous post below. I will be grateful, if you read this post and it helped in someway through your bitcoin journey. If you have liked this post or want to provide a feedback kindly leave it in the comment section below.