Investing in Bitcoin can be a great way to diversify your portfolio and gain exposure to the demand for digital currency. However, since the price of Bitcoin is volatile, experts suggest having a lower portfolio allocation to Bitcoin to help boost returns without having too much exposure to portfolio losses. Cryptocurrencies are very risky and not like conventional investments in the stock market. A safer but potentially less lucrative alternative is to buy shares in companies with exposure to cryptocurrencies.
Unlike stocks, Bitcoin has no intrinsic value and is not backed by any physical asset, such as gold or silver. There is also no central regulator to ensure that the value remains stable. The value of Bitcoin depends on market demand; when there are more people buying Bitcoin, the value will increase, and when there are fewer people buying Bitcoin, the value will decrease. It is recommended to have an emergency fund and pay off any high-interest debts before investing money in Bitcoin or any other cryptocurrency.
Ethereum is creating a global computing platform that supports many other cryptocurrencies and a massive ecosystem of decentralized applications (DApps). Bitcoin miners are rewarded with real Bitcoin for their contributions. Most major banks in the UK now allow you to move money between a regulated exchange and your bank account. You should also avoid any unsolicited offers related to cryptocurrencies; research yourself and buy your coins yourself using a reputable cryptocurrency exchange.
Blockchain also employs a “public ledger”, which uses thousands of computers (called “nodes”) to keep track of coins and their owners. The money only leaves your bank account when you buy the currency itself, not when you make purchases with a currency.