How to Invest in Bitcoin in 2022? BTC Investment Guide: Is It Worth Investing Or Not?

Christina Clarke
October 8, 2021
The currency, based on so-called blockchain technology, was preparing to revolutionize a sector in the interests of its anonymous developer, in which there was no fundamental innovation for centuries. How to Invest in Bitcoin? Is it profitable
How to Invest in Bitcoin in 2021 BTC Investment Guide Is It Worth Investing Or Not

No central authority, global availability, cryptographic legitimation: Bitcoin was launched in 2009 with this straightforward formula – and a much more complicated white paper.

The currency, based on so-called blockchain technology, was preparing to revolutionize a sector in the interests of its anonymous developer, in which there was no fundamental innovation for centuries. How to Invest in Bitcoin? Is it profitable

Table of Contents

Infobox: Bitcoin Investments
  • In 2019 , the Bitcoin price almost doubled ( + 93.2% ). If you had invested € 1,000 in January, it would have been worth € 1,932 in December.
  • With a little timing, even more, would have been possible: In July, the increase would have been 221.6%, which means that € 1,000 would have turned into € 3,216
  • The developments are also suitable for 2020. CurrentlyNext your investment would be around + 40% compared to the beginning of the year (status: Sep. 2021)
  • To invest, you need a broker or an exchange, as well as a wallet if necessary.
  • Roinvesting: is the best and most beginner-friendly broker
  • Libertex is also a very beginner-friendly exchange, our 2nd place in the broker test.
  • Plus500: is a broker aimed at advanced traders.
  • A wallet that is a little easier to manage is offered by Roinvesting, for example.
  • We show you more wallet options here.

Many initially thought this was an elaborate gimmick. But over the years, a huge market has developed based on the model of the cryptocurrency. And while more than 2,100 cryptocurrencies compete for the favour of users and investors, Bitcoin continues to lead it.

Investing in Bitcoin: The Best Bitcoin Brokers and Exchanges

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Pros & Cons of Bitcoin Investment

  • Promising cryptocurrency
  • Decentralized, digital currency that ignores the middleman (financial institutions and banks)
  • Participation in trading worldwide is also possible without your bank account.
  • Substantial market cap and spread
  • Powerful developer community
  • Political explosive potential (see: crypto-anarchism)
  • It cannot be stopped thanks to decentralization by governments
  • Technological restrictions, for example, in terms of scalability
  • High volatility: performance is subject to extreme fluctuations
  • At this point, it is unclear which regulations will be sought by governments in the future
  • The promise to enable everyone to participate in mining did not work out
  • Extreme power consumption due to mining (currently roughly comparable to power consumption in Ireland)

One problem with any investment in Bitcoin is its high volatility: Bitcoin can fall sharply in price – or increase – within a brief period. This changeable movement has shaped the price behaviour of Bitcoin for years. Investors, therefore, need strong nerves:

It is not for nothing that the term HODL has become established in the scene. Because their applicability or quality does not drive the price behaviour of cryptocurrencies. The only decisive factor is investor psychology, which is, of course, influenced by many factors.

Anyone who was one of the unfortunate people who invested in the cryptocurrency Bitcoin at astronomical prices in the winter of 2017/2018 would have been suitable to react as quickly as possible to the first price drops.

How do I invest in Bitcoin 2021? How to invest money in Bitcoin Instructions:

How to Invest in Bitcoin

We discussed the pros and cons of investing in Bitcoin and found that Bitcoins can be used to make money – but there are several ways to do it:

How can I invest in bitcoins? Which form of BTC investing suits me? What are bitcoin stocks? 

First step: Registration with a broker or a crypto exchange

First, you register with your broker or crypto exchange of choice. To buy Bitcoin, we use broker ROinvesting, as this offers the advantage that you can buy both real cryptocurrencies and CFDs – thus combining the benefits of a broker and an exchange.

First, we click the link to register for Roinvesting:

In the form, we enter username, email and password and accept the terms and conditions:

We then receive an email for verification in which we click on the link to confirm the account.

Second step: top up your account

In the next step, we have to top up our account with money to buy Bitcoin at Roinvesting. To do this, we click on the “Deposit money” button at Roinvesting:

Then click on the “Send” button to deposit the amount.

Further payment methods with our test winner Roinvesting:

In our example, we show the purchase with a credit card. Roinvesting also offers other deposit options :

Payment optionPossible?
Buy bitcoin with a credit card✔️
Buy bitcoin with PayPal✔️
Buy bitcoin with Skrill✔️
Buy bitcoin with bank transfer✔️
Buy Bitcoin with Neteller✔️
Buy Bitcoin with UnionPay✔️

Third step: buy bitcoin

Now that we have topped up our account, we can start buying Bitcoin. To do this, we click in the search field above and enter “Bitcoin” there.

Then we click on the “Trade” button:

The purchase window then opens. Here we have the following options:

  1. Buy or sell: In our case, we have to select “Buy”
  2. Trade or orders: Here, we can choose whether we want to execute the trade immediately (trade) or with a delay (order).
  3. Amount: How much Bitcoin do we want to buy
  4. Stop Loss and Take Profit: At what loss or profit our position should be automatically sold.
  5. Leverage: With what leverage do we want to buy Bitcoin? With leverage X1, we buy real Bitcoin. With leverage X2, we buy leveraged Bitcoin CFDs.

After configuring all the settings, we click on the ” Open trade ” button to complete the purchase.

Now we have Bitcoin in our portfolio, the investment in Bitcoin is complete!

Types of Bitcoin Investments:

How to Invest in Bitcoin

1. Buy Bitcoin directly

If you want to buy Bitcoin, you have to turn to one of the many existing crypto exchanges. The choice is vast. The editors of Securedbrokers have tested the best exchanges and will guide you through the process step by step in a guide to buying Bitcoin.

How do you get Bitcoin? Where can I pay Bitcoin in euros? You will find out in our piece.

Buying Bitcoin often requires your Bitcoin wallet. But there are also exchanges where you can hold your acquired Bitcoin. This is convenient, but it is subject to risk: If the exchange closes because it goes bankrupt or is hacked, you may lose your Bitcoin investment.

Your own wallet is therefore the better alternative when buying Bitcoin. This is clarified in detail in our Bitcoin investing guide.

Anyone who decides to buy Bitcoin when investing in Bitcoins in 2021 is completely dependent on the price movements of Bitcoin. In addition, investors from South Africa must also be concerned about the tax regulations for BTC investing. You can find more information on this on our overview page for Cryptocurrency Investments 2021.

2. Trade Bitcoin

If you just want to trade with Bitcoin without buying Bitcoin, you can contact one of the numerous crypto brokers. The editors of Securedbrokers recommend trading Bitcoin derivatives – CFD trading. Trading CFDs has one simple advantage: regardless of the Bitcoin price, you can often achieve high returns here if you correctly predict the price behaviour.

This can also go wrong: Investors may lose their investment completely within just one trade with derivatives trading. Therefore, when you start trading CFDs, you should initially only make small contributions.

3. Buy bitcoin stocks

When buying Bitcoin shares, the investor also makes himself dependent on the Bitcoin price. The advantage: The shares trading is already familiar to many investors, the access barrier is smaller. Fortunately, investing in Bitcoin in 2021 will be easier than ever:

If you don’t want to mess around with wallets and private keys but still think in the medium to long term, Bitcoin stocks are a particularly attractive alternative.

In addition, unlike cryptocurrencies traded on the crypto exchange, stock trading is strictly regulated. As a result, the Bitcoin investor receives additional security when he invests in Bitcoin stocks but cannot use Bitcoin as a means of payment – because he does not buy Bitcoin directly.

There are now a variety of Bitcoin stocks that investors can choose between. These include, for example, Bitcoin mining stocks, blockchain services and Bitcoin investment trusts. We have put together an overview of the possibilities of Bitcoin stocks for you at this point.

4. Bitcoin mining

The so-called miners are a supporting foundation for the Bitcoin network. Because through mining, new blocks are “mined” or created on the Bitcoin blockchain. The transactions recorded on the previous block are confirmed by means of the new blocks. Therefore, there would be no more transaction confirmations without mining, and Bitcoin could no longer be traded.

To prevent this, the miners in the network are automatically rewarded for their efforts. For every new block, they receive bitcoins. In addition, they receive the transaction fees that are incurred on the block they have found for further transactions.

Proof of Work (PoW)

For a new block to be found in the Bitcoin network, the miners have to carry out so-called proof-of-work processes (PoW). This is about the decryption of cryptographic algorithms, which varies depending on the network load.

Following successful decryption of a new block, the network checks whether the block actually exists.

A brand new block is created in the Bitcoin blockchain every ten minutes. As soon as 2,016 new blocks are found, the difficulty of mining changes. This is currently the case about every two weeks.

Because each block has the previous block’s cryptographic key, manipulating the Bitcoin blockchain is virtually impossible.

Bitcoin Falling: Is It Too Late To Invest Bitcoin?

The really big hype is over the Bitcoin bubble burst. Even so, many professional investors still believe that Bitcoin is yet to unfold.

To make an accurate forecast about the future of the market would be more than presumptuous. So instead, we look at which scenarios are conceivable – and weigh them up against each other.

The hype about Bitcoin has grown continuously over the years. The coins originally available for cents suddenly reached 300, 600 and even 900 euros on the crypto exchanges. However, each of these attacks was followed by recourse.

In the winter of 2017/2018, the Bitcoin price rose by several thousand percent within a few days. Suddenly the Bitcoin was quoted at over 17,000 euros per coin. The news turned into increasingly enthusiastic reports, with Bitcoin dominating the headlines. As a result, more and more investors are investing in Bitcoin, one of the other cryptocurrencies or in the Initial Coin Offerings (ICOs), often unfortunately dubious companies.

The slump followed only a little later: The headline headlines that Bitcoin is falling. Early investors made incredible profits. But most of them lost. The market has not recovered from the price slump since then.

When does the Bitcoin price rise?

How to Invest in Bitcoin

Bitcoin may not have reached the end of its downward slide yet. As a result, some sceptics believe that Bitcoin cannot achieve the necessary acceptance to establish itself in society as an alternative means of payment in the long term.

On the other hand, some enthusiasts assume that Bitcoin will soon rise again and above its previous record. 

In any case, Bitcoin development has made great strides with introducing the Lightning Network and the Segwit update in recent years. So even if many investors are initially deterred after the Bitcoin bubble burst, it is likely that blockchain technology will sooner or later find its way into our everyday lives. The great advantages and possible uses that cryptocurrencies make possible are too good.

Bitcoin acceptance is increasing

Regardless of the heights Bitcoin shoots to on the next run: The still huge market capitalization of the coin of over 60 billion euros speaks a clear language. The investor base does not intend to say goodbye to Bitcoin anytime soon. However, many people continue to believe that the Bitcoin market is yet to develop its potential and that the market is still just getting started.

The many positive signals that have been through the news in the past few weeks and months also speak in favour of new price increases: the acceptance of cryptocurrencies is increasing among the regulatory authorities. Bitcoin investment trusts are no longer uncommon. The next price increase may even be imminent.

Volatility: When the dip is followed by an increase and the increase is followed by the next dip

However, experience shows that a new price increase often follows a Bitcoin price slump. That is why at the time, many people struggled with the decision. Today we know: that was fatal.

Since the market is now in a different phase, it is unclear what behaviour is appropriate here. A price increase at any time can still follow a price slump. So the first impulse to sell your investment quickly before the losses get out of hand is understandable:

It can be said, however, that it is not always advisable to follow the first impulse. On the contrary, often, it is even wise to go against the trend.

Bitcoin Investing Tips & Tricks

The following bitcoin investment tips can help you become a good bitcoin investor. First and foremost, there is a meaningful sentence: You should only invest what you are willing to lose. Second, it’s best to start small and gradually get used to everything. Because mistakes are part of learning here too – and can cost you dearly.

A good tip: say goodbye to your investment internally. Then it will be easier for you to make neutral and tactical decisions. For example, investing in Bitcoin is risky, regardless of which type of investment you choose.

Before investing in Bitcoin 2021, you should be fully aware of this. Do not let others mislead you into an act that will ultimately harm you. Be humble, be patient. Start small.

The cross with investor psychology

As already mentioned above, the prices of cryptocurrencies are mainly driven by one thing: investor psychology. The number of investors and the volume of their investments determines which cryptocurrency is on the market.

It can be difficult to control yourself when the system suddenly falls. If a new hype starts the next day, even before you’re on board, the perceived damage is double and triple.

Be aware of this and try not to fall for yourself. This is more difficult than it sounds and an art that must be learned above all by anyone who wants to earn short-term bitcoins.

“What type of Bitcoin investor am I?”

 

How to Invest in Bitcoin

Ask yourself what type of investor you are: The ” gamer ” type regularly deals with his investment and tries to achieve medium-sized profits in the short term to reinvest what he has gained straight away.

The Bitcoin market offers this type an attractive investment option, especially through CFD trading. But this strategy can also be used to earn good money with Bitcoins directly on the market.

If you’re less risky, consider making a medium to long-term investment in Bitcoin instead. Not only will it make you feel better: the chances are good that investing in Bitcoins will one day pay off for you in 2021.

In addition, under current law, you do not have to pay taxes on your profits if you hold your investment for at least a year. Alternatively, you could invest in Bitcoin stocks to benefit from Bitcoin development without dealing with wallets or private keys.

Your wallet is – actually – mandatory

If you buy Bitcoin with your investment and rely on the Bitcoin development rates, you can keep your Bitcoin on your exchange account. But that is not advisable. Our tip: Make sure you get your own BTC wallet! Only then are you immune from eventualities such as hacks or bankruptcy of your stock exchange.

Last but not least, we recommend that you do not limit yourself to one Bitcoin investment – but rather diversify your investment. For example, if you have at least five assets in your portfolio, you will drive more safely than if you bet on a single horse. It can also be advisable to include forms of investment in your portfolio that are less risky than cryptocurrencies. For example, you could buy stocks online.

Lots of ways to earn bitcoins

There are now a variety of ways to earn money with Bitcoins. Fortunately, investing in Bitcoins in 2021 can be done in many different ways. For example, instead of buying bitcoin, you could invest in a bitcoin investment trust.

You could participate in banking on Bitcoin or trade Bitcoin derivatives. With these models, you don’t have to buy Bitcoin. With derivatives trading, you can still earn bitcoins even if the bitcoin is falling. Because here you are speculating on the price behaviour of Bitcoin.

Bitcoin Investing Conclusion – How Best To Invest In Bitcoin?

If the signs are right, investing in Bitcoin will still be worthwhile in 2021 – or: again. Because perhaps the only wholly decentralized and, at the same time, most widespread cryptocurrency is still a long way off without it.

And the Bitcoin development continues. Bitcoin will lose its pioneering role is hardly conceivable today, given its enormous lead even over the second largest cryptocurrency Ethereum.

It is more difficult to weigh up the innovation factor on the Bitcoin market: because a young high-tech segment like this can change at lightning speed through innovation. That is why – and because the acceptance and spread of Bitcoin is still too low – BTC investing is still a risky game. Especially those who think short-term can lose a lot of money.

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FAQs

The most popular is probably the direct purchase of cryptocurrency. Trading in Bitcoin stocks or Bitcoin CFDs is becoming more and more popular.

There is no golden rule for this. However, one should always keep in mind that online currencies are highly speculative values associated with the corresponding risk, so investing more than 5-10% of your portfolio in such trading is advisable.

The article above introduces the best ways to invest in BTC.

With our test winner, getting started with Bitcoin is made easy. If you want day trading, you can also make use of CFD derivatives.

There is no general answer to that. Bitcoin is undoubtedly one of the safest cryptos around. The rates of other coins usually follow the BTC rate to a certain extent. Under certain circumstances, Alt Coin offers a higher potential, but this is associated with a higher risk.

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