There’s a number of ways! Some might suggest holding Bitcoin itself might bring positive returns in the future, others quite the opposite. One of the beauties of Bitcoin is that it has a finite number. The formula only allows a limit of 21 million Bitcoins to be mined and so far 16,141,163 Bitcoins have been mined. Once we hit 21 million, that’s it!
there are two ways to use digital currencies. First is the safer method which is to play the long game and buy and hold. Second is to play the short game and do a lot of buys and sells almost like day trading. Let me go over both options.
The long game of buy and hold is for people who believe Bitcoin has a lot more room to grow. This is how a lot of folks are investing and even billionaires have come out and said they have at least 10% of their investments into Bitcoin. Since 2016, Bitcoin has risen from $250 dollars to over $2850 dollars (as of 6/13/2017). Because of the limit cap of 21 million Bitcoins, there is very real chance that once we approach that last Bitcoin, the value of Bitcoin skyrockets to something we can’t even fathom today. Some are predicting Bitcoin to be around $500,000 by end of 2030. At this point, it’s anyone’s guess.
The short game would be to buy and sell Bitcoins daily or weekly. Just like any other kind of investment such as stocks, bonds or currency, you want to buy low and sell high. There are weeks where Bitcoins has wild fluctuations and if you time it correctly, you could make as much as 20% profit within a few days. Even without the wild fluctuations, there are still highs and lows and you can profit from. There’s so much to say about trading platform specially for huge profit it’s Whaleclub. It’s really easy to use. From the moment you deposit bitcoin or dash, you’re up and running. Then, with a click, Buy if you think price will go up, or Sell if you think it will go down. Submit and close trades in milliseconds. Everything about Whaleclub is designed to work beautifully and exactly as you expect.
Whaleclub is packed with brilliant features. Instant, 0-confirmation deposits. Low-latency execution. Low-cost spreads. Integrated news, analysis, and trading ideas. Free and unlimited demo trading. And a stunning trading dashboard.
Because Whaleclub is specifically engineered to run on digital currency instead of fiat, everything feels fluid and fast. Just click to trade, and browse the latest news and analysis right from your dashboard. And say goodbye to the pain of partial execution and slippage. All trades are executed fully at the prices that are quoted. No other trading platform is so effortless and natural.
Whaleclub offers a trading experience that stands apart. When digital currency blends with worldwide markets, something really special happens. The trading dashboard is as elegant as it is powerful. Easily set take profit levels, stops, and trailing stops that work exactly as you expect.
Whaleclub also offers turbo trading. It’s a super-charged form of trading where you forecast the direction of price on 1-min to 5-min timeframes and get paid up to 75% of your investment in profit if you’re right.
Privacy and security are at the core of everything Whaleclub makes. 100% of customer funds are secured in offline cold wallets. 2-factor authentication adds an extra layer of security. And high-grade encryption ensures the privacy of sensitive information.
Risks and Rewards
So that’s how you make your foray into Bitcoin. It’s important, though, to first ask yourself if you really want to in the first place.
For conventional currency markets trading in the monies of stable, profitable countries, the fluctuations within the value of each currency is measured in fractions of a penny. Bitcoin values, on the other hand, rise and fall dramatically throughout each trading day, jumping in whole dollar amounts. This means that if you don’t have your act together and place a transaction order at the right time, you will lose magnitudes more cash than you would have trading dollars for yen. The value of Bitcoin as a whole, for example, dropped more than 50 percent over the 36 hours after China banned the cryptocurrency. A lot of speculators lost their shirts during that day. And it will almost certainly happen again.
What’s more, unlike traditional arbitrage play, the inherent volatility of the BTC market all but forces investors to offload their coins as quickly as possible to avoid getting caught in a crash. However only when investors hold onto their digital commodities for longer periods of time will the market actually stabilize. It’s a catch-22. And without commercial institutions like banks, which have huge reserves of liquid capital they can rely on, individual investors often can’t afford to just sit on their Bitcoin and wait for a rainy day.
Conversely, if one were to take the super-long view and, say, bought a few shares in 2012 at a sub-$100 price point, even with Bitcoin dropping half its peak value, that investor would still theoretically make over a 600 percent return on his investment just by waiting. Granted, the sub $100 days are likely now over, what with the currency’s new-found stardom so we’ll have to wait and see how the market plays out.
Volatility comes from the buying & selling , and that is what truly drives a market.
And when you buy or sell your coins, you are limited to that amount gained or loss with using margin trading , your profit would be multiply.
Even those big hits, though, come with big tax implications. As Forbes contributor Cameron Keng points out:
Bitcoin is taxable, whenever a taxable event occurs. A taxable event is whenever you cash out your bitcoin for any fiat currency (dollars, euros and etc.) or when you trade a bitcoin for anything (bartering). In taxation, bitcoin is best understood as an “asset.” Whenever you hold an asset, it can increase or decrease in value. When you trade the bitcoin for fiat currency, then you’re trading an asset for dollars. It works the same way as when you trade gold bullion for dollars.
Bartering or exchanging bitcoins for anything is also a taxable event. For example, Bob trades 1 bitcoin for a year’s worth of hugs. Bob traded or bartered 1 bitcoin for a year’s worth of hugs or a service. This is a taxable event. The same is true, if you traded 1 bitcoin for a tangible or intangible object. This even applies if you’re trading 1 bitcoin for another bitcoin.
Simply put, if Bitcoin is to be treated like legitimate currency, it’s going to be taxed like legitimate currency.
Nor should you assume that your Bitcoins are completely secure either. As Mark Vankempen, senior advanced R&D engineer at LogRhythm, explained to the IT Business Edge:
A BTC wallet is like a real wallet filled with cash. You should never keep all your eggs in one basket and the BTC wallet is no different from this age old idiom. So far there is no air tight solution to keeping your BTC safe and secured…the following action items that can help protect your BTC investment: Backup and encrypt your wallet, make multiple copies of your backup, store them in more than one secure location and finally, don’t keep all your BTCs in one wallet.
The Bitcoin’s meteoric rise in value and the relatively low risk of being caught stealing it have also combined to make the currency a huge target for cyber criminals. Smaller online exchanges that have skimped on security systems can be hacked. The Sheep Marketplace, for example, had 96,000 Bitcoins (worth $220 million) stolen earlier this year, as did GBL and Tradefortress. Criminals also routinely target internet-connected computers that store individual Bitcoin wallets, attacking them with everything from malware and phishing tactics to old-fashioned social engineering. And as recently as last November, thieves stole nearly a million dollars worth of Bitcoin from Bitcoin Internet Payment System (BIPS), a Denmark-based Bitcoin payment processor.