Investing in Bitcoin is becoming increasingly popular, especially with the myriad of online brokerage platforms that you can easily sign up for and start buying and selling through. But many people are still on the fence about the notion of being able to live a luxury lifestyle just by investing in digital currency.
Is it really possible to live off of your Bitcoin investment earnings? To help you answer that question, here are a few ways that people are using to accumulate wealth using Bitcoin.
Hodl and Buy
If you read an article somewhere that mentions the word “hodl”, it’s not “hold” misspelled. Hodl is a new term coined by the investing community that essentially means the same thing as the word it’s commonly mistaken for. When you hodl a cryptocurrency, like Bitcoin, you hold it for a substantial period of time and hope that the price jumps a significant amount over time so you can pocket massive gains.
Do Short-Term Trades
Trading is a completely different approach and should not be mistaken for investing. While the latter suggests holding an asset, in this case Bitcoin, for longer periods of time in hopes that its value increases, trading involves buying and selling assets within short intervals to capitalize on short-term crypto price fluctuations. Given Bitcoin’s notoriety for price volatility, however, one should only consider trading cryptocurrencies if they have a well-rounded strategy and risk management plan.
It’s difficult to get into Bitcoin investing, considering that one BTC costs the same amount as a brand new SUV. Fortunately, you don’t have to buy whole Bitcoins to start investing in this space. You can buy fractions or stakes of it. Many wallets and investing platforms allow you to purchase small portions of Bitcoin or any other cryptocurrency you choose to invest in. You simply type in the amount in dollars and the system computes for how much BTC you can get.
Buy Bitcoin Dividends
Dividends in cryptocurrency work the same way they do with stocks or bonds. It essentially means you get paid a predetermined interest over time. This appeals to investors who prefer a guaranteed payout in the long term. While it’s similar with stock dividend yields, note that cryptocurrency dividend has some notable differences, one of which is that payouts can wildly vary and often change daily or monthly. This will depend on the cryptocurrency’s trading volume.
Get Referral Rewards
Since cryptocurrency is still relatively new, a lot of people still don’t know much about it or care to sign up for a wallet. To get the public’s attention and fight for their lion’s share of the market, many investing platforms offer referral rewards to their users who successfully refer their platform to family and friends. Some platforms, like Robinhood, will either reward you with cash you can invest or actual cryptocurrency. Regardless, if you have the connections, referral rewards can be a good way to pad your starting capital and amplify the potential gains.
Investing in Bitcoin or any other asset for that matter should be approached with caution. Only invest your capital once you are comfortable with how the market moves.