I Decided to Hold onto My Bitcoin - Here's Why
If you own bitcoin, there’s one decision you have to make every day when the markets open and close – whether or not to sell your holdings of the cryptocurrency in order to cash out your profits in USD or another fiat currency. The crypto market has been booming over the past few months, so it’s tempting to cash out as soon as possible. However, even though I sold most of my bitcoin holdings at its all-time high of almost $20,000, I recently decided to hold onto the rest and wait for more upside potential. Here’s why...
What is a Digital Currency
A digital currency (or cryptocurrency) is a currency that exists only in digital form. It is not represented by physical objects, such as coins or paper money, but by records of transactions on ledgers. In order to make any transaction with a digital currency, you must have an address where it can be stored online. An address typically consists of 27-34 alphanumeric characters beginning with 1 or 3, though each currency has its own unique variation and addresses for different types of wallet.
What are the Benefits of Owning Bitcoin
You don’t have to do much, but when you do, you will make a lot of money. If you own bitcoin and hold on for a few years, especially if it appreciates like it did in 2017, you could end up with a LOT of money. Bitcoin was valued at $997 on January 1st 2017.
What are the Drawbacks of Owning Bitcoin
Despite all of its benefits, one major drawback of owning bitcoin is that it’s unregulated and therefore extremely volatile. The value of a single bitcoin can fluctuate wildly depending on a number of factors, such as regulatory announcements and market speculation. At times, one bitcoin can be worth thousands of dollars—but it’s also possible for it to lose almost half its value in just hours.
How do you buy, sell, and store cryptocurrency?
Whether you’re thinking about diving into cryptocurrencies or already have a few coins under your virtual belt, it’s wise to make sure you understand how you can buy, sell, and store your cryptocurrency before you take things further. Once you understand how different currencies work, you can decide which ones make sense for your portfolio—and for how long. (See also: The 8 Most Valuable Cryptocurrencies.)
Should you invest in Cryptocurrency?
There are two ways to approach bitcoin: as a currency or as an investment. On one hand, you could buy some bitcoin and think of it like you would any other currency—you can hold it, trade it, spend it. This is how most people use bitcoin. Then there’s another way of looking at it—as an investment. You buy some bitcoin with a goal to sell later at a higher price.