Bitcoins: Investment vs Trading

Bitcoins: Investment vs Trading

The hype behind bitcoins is almost a household name now. With people from all over the globe, especially India, rushing in to join the Bitcoin bandwagon, a common question they face is whether they should invest in the currency and stay at it for the long haul, or do quick trades and make money at the highs and lows.

To better answer this question, an understanding of investments and trading concepts is imperative. Let’s dive in.

Investment vs Trading

Both investment and trading methods are used by investors and traders for monetary gain. There is always a dilemma about which one of the mentioned is better in giving returns. While that is debatable, some other facts are not.

For a long time, people have been confused about which one is a better option. There is no definite answer as both can give you great returns. It depends on with which one you are more comfortable with. Which one you can pull off better. Great investors believe like Warren Buffett, Peter Lynch and Benjamin Graham believed in value investing and made great fortunes by investing in great stocks.

  • Investment is primarily focused on holding the assets and waiting for long periods until it gives good returns. Investment is a long process and if you are willing to research well and have patience; it can be fruitful for you. Wild guesses in long-term investments or speculation can lead you to trouble.
  • Meanwhile, trading is a short term ‘buy’ and ‘sell’ method where you will buy for a short period of time and sell as soon as you are making reasonable returns. You will then repeat this process at the high and low prices. ‘Stop-loss’ is a very important factor if you are willing to trade. Trading can be a risky business as well as very profitable; if you are not doing it correctly, you can end up losing a lot of money.

In the case of Bitcoin, things are little different because of its high volatility. Bitcoin’s price has witnessed some wild fluctuations over the years, which is why many initial investors were hesitant to get into it.

Now, having observed bitcoins for more than half a decade, we are in a better position to recommend an invest/trade call on Bitcoin.

Use coupon “FBE200” during signup & grab free bitcoin worth Rs 200.

Investment in Bitcoin

Investing in bitcoins is very much similar to investing in securities. It is known fact that Bitcoin has delivered humongous profit in the last 6–7 years. No other investments have shown such growth in recent times. If you had invested Rs 4,500 about 7 years ago, you would have been richer by a staggering Rs 459 crores today.

This fact has attracted a lot of investors to bitcoins around the world. Even more thanks to Satoshi Nakamoto, who programmed bitcoins to have a finite quantity. A limited number of bitcoin will result in high demand, and high demand will ultimately hype bitcoin prices in the market since more investors will continue to come in. This is an obvious observation according to the ‘law of demand’ of economics.

Investors can get started on bitcoin by buying it off exchanges like Unocoin.

Trading in bitcoin

Fluctuation is the most opportunistic property of bitcoin. Bitcoin is known for its high volatility in the market. Its fluctuation is much higher compared to shares, commodities or mutual funds. However, this shouldn’t be something to worry about.

Intelligent trading can be very advantageous for you. Waiting for the prices to go down, grabbing them at the right moment and selling them when the price gets higher can be very profitable. Investors get edgy when they see this volatility and exit their investments. So arguably, trading in bitcoin could be somewhat better than investing in it. Buy at low & sell at high. Take a look at bitcoin’s edgy price charts to let the volatility sink in.

Source: blockchain.info

Ideally, it can be argued that trading is a better option than investing in bitcoins. But, an undeniable fact is that Bitcoin has delivered huge profit to investors as well. There is no doubt that bitcoin has favoured the brave investors who stayed invested in it.

Regardless of whether you invest in bitcoins or trade in them, diving into the bitcoin world is something no longer a matter of debate. Get started with bitcoins on Unocoin now.

Use coupon “FBE200” during signup & grab free bitcoin worth Rs 200.

Sources & Research:

https://www.cryptocoinsnews.com/bitcoin-price-trading-vs-investing/

http://time.com/money/4623650/bitcoin-invest/

http://www.investopedia.com/ask/answers/12/difference-investing-trading.asp

http://www.newtraderu.com/2017/07/19/difference-investing-trading-bitcoin/


Also read:

https://blog.unocoin.com/how-has-bitcoin-changed-the-global-economy-e33fac2e2316

How has Bitcoin changed the global economy?

Over the past few years, Bitcoins have been gaining significant importance around the world. Indeed, it is the world’s leading crypto-currency and the year’s best-performing currency. It has gained a staggering 35 percent across last year. Achieving this recognition has not been easy. Its association with crime, that is, the money laundering and narcotics through the infamous online black markets like Silk Road & Alphabay, and the alarming amount of price volatility left regular financial-market participants wary due to its potential risks.

How has Bitcoin changed the global economy?

Effect of Bitcoin on Banks and Industries

The potential impact of the digital currency on the central banking should not be taken lightly. The Bank for International Settlements (BIS), jointly owned by the world’s leading central banks, noted in November that bitcoin could interrupt the ability of central banks to exert control over the economy, as well as issuing money.

As of now, many central banks are closely observing developments in the growth of bitcoin. Many others, however, have already responded by sending out proposals for the issuance of a digital version of their fiat currencies. The central banks of Canada and Ecuador are a few among the first to explore such opportunities.

In recent years, the influence of Bitcoin has brought change to variety of industries.

Industries that have begun to accept Bitcoin as payment are mostly online companies themselves. The company Cheapname, that provide services which involve domain name registry, is accepting bitcoins as a mode of payment. Other digital companies like WordPress, which provides resources to set up professional and private blogs accept bitcoins. The company Steam — is a computer game distributor and a general gaming platform — accepts these currencies too.

The success has even brought Bitcoin from the digital realm to the real world. A founder with a well-documented penchant for R&D and all things state-of-the-art, it is sort of predictable that Virgin Galactic accepts bitcoin as a payment method. The same also holds true for a car company — Tesla and its founder- Elon Musk, which accepts Bitcoins.

Use coupon “FBE200” during signup & grab free bitcoin worth Rs 200.

Bitcoin’s Political Impact

Bitcoins bring with themselves a good amount of political controversy. This is because no single government can entirely control them. They are an explicit form of wealth for individuals alone, and no state can expropriate that because of the cryptography that they are built on top of.

Now, people are gradually coming to understand that cryptocurrencies are better forms of money because they are governed by code alone, making them a digital sacrosanct contract.

The effect of virtual currencies on society hasn’t been fully realized yet and will not be felt either immediately. Despite the generation of virtual currency, it has barely managed to reach the surface of the mainstream society. Most people still are yet to hear about Bitcoin and how virtual currencies work. 
But a large number of vendors are now beginning to pick up bitcoins for payments. And it’s only a matter of time until many more of them follow the suit.

Bitcoins effect on the global future

Today, typically almost every digital and international transaction involves use of one form or another of virtual currencies or credit.

Hence, bitcoin is designed to provide the same security guarantees and the convenience of credit while foregoing its extra processing times and fees.

(Source: The Hindu Business Line)

The arena with the biggest potential for bitcoin all around the world is probably international remittances — that is, money sent home by workers who are earning abroad. Right now, this money has to be handled by several intermediaries including banks, wire services, and other currency exchanges. A recent report study by Businessweek showed that the average fee paid for remittance services was 9% of the money transferred, with conversion to cash often costing an extra 5 percent. Western Union’s profit margins for intermediation are huge at almost 16%, and most of its costs are due to the technologies involved in moving money from one place to another, guaranteeing the legitimacy of the transaction. In brief, Western Union expends in billions just to do what Bitcoin can do or does for free.

With the increase in acceptance of Bitcoins across various industries, its impact is only likely to increase.

Want to jump on the bitcoin bandwagon? Get started on Unocoin.

Use coupon “FBE200” during signup & grab free bitcoin worth Rs 200.

Also Read:

https://blog.unocoin.com/the-rise-rise-of-bitcoins-8d18be682e27

The Rise & Rise of Bitcoins

The Rise & Rise of Bitcoins

There are many, many questions that surround Bitcoins. Ranging from how they have become so valuable, to their future viability. The most common one is perhaps — “Who created Bitcoins?”

Quick History

There is no straightforward answer to this question. The identification of bitcoins’ inventor remains a mystery. All that we have is a pseudonym — Satoshi Nakamoto — and we’ve covered Satoshi Nakamoto extensively in a previous post. Nakamoto’s accounts are no longer active and the coins in his wallet too have never been spent. Satoshi Nakamoto has disappeared from the world, or so it seems like it.

However, we do have some interesting facts about the rise of these currencies:

  • Firstly, on October 31st, 2008, “Bitcoin: A Peer-to-Peer Electronic Cash System” was posted to a cryptography mailing list which was published under the name “Satoshi Nakamoto”. This whitepaper had outlined the foundation of how the Bitcoin would operate.
  • Secondly, on August 18, 2008, an unknown entity registered the Bitcoin.org domain.
  • And finally, on January 8th, 2009, the first version of Bitcoin was announced, and shortly after, Bitcoin mining began.
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The Growth and Value History Of Bitcoins

Until 2013, almost all markets that consisted of bitcoins were in US dollars. In the beginning of April in 2013, the price per bitcoin dropped from $266 to around $50 and then rose to around $100. Again in late June 2013, the price dropped steadily to $70. However, the price began to recover steadily, peaking once again on October 1st that year, at $140.

On October 2nd, The Silk Road was seized by the FBI causing a flash crash to $110. Yet, the price rapidly rebounded, returning to $200 several weeks later.

In April 2014, the prices fell to around $400, before rallying in the middle of the year. It then declined to around $200 in early months of 2015.

During May-June 2016, there was a large spike in the value of Bitcoins which reached up to $750. By the end of September 2016, this value was stabilized.

However, Bitcoins took a large growth pill in the second quarter of 2017, where prices have now doubled from $1200 to over $2500.

As of early August 2017, the value of a Bitcoin is equivalent to $3900.

Clearly, there’s no stopping bitcoins. Minor setbacks aside, the price will clearly only increase. Why though? This brings us to its next aspect — acceptability.

Acceptability of Bitcoins

Bitcoins are still more perceived as investments than payments as of now. As their mainstream acceptability continues to grow, proper regulation will follow.

Digital currencies became very popular among tech businesses as they needed transferring of large amounts of funds overseas. Bitcoins also became famous amongst the criminal class for drug dealing and money laundering online.

While some countries have explicitly allowed use and trade of Bitcoins, certain others have banned or have restricted it.

(Image source: Bitconist.com)

As of now, the general acceptability of Bitcoins is lower than other payment methods and currencies. This is especially due to the fact that the concept of crypto-currencies is still new to the mass.

An interesting turn of events is the acceptance of Bitcoins in the educational industry. Several colleges around the world have begun to accept Bitcoins as a means of payment. This is a move which will easily help bring cryptocurrency right into the mainstream.

Finally, the acceptance of Bitcoins, in general, has already made many companies consider genuine investment opportunities in the currency, further fueling its journey into the mainstream world. Hence, it is not extremely unusual to find savvy businesses accepting Bitcoins as a payment method for most goods and services.

Market Capitalization

Market capitalization is the total dollar market value of a commodity. The investment community uses this figure in order to determine its economic size, as opposed to using sales or total transaction figures.

Bitcoin’s market capitalization now (at the time of writing this article) stands at $31.89 billion. The currency is now seeing over $129 million in 24-hour trades making it the fourth highest trading volume across global cryptocurrency markets. A large number of factors are responsible for the rise of Bitcoins all the way from an increased trading in Japan to debates over the future of Bitcoin’s underlying technology.

A Bitcoin Future

It’s necessary to understand that, much like the early days of 1992, Bitcoin is a new technology — and new technologies take decades to reach critical masses. But, just like the Internet, no one wants to miss out on the ‘next big thing’ — and bitcoin has more or less established itself as one of those.

Use coupon “FBE200” during signup & grab free bitcoin worth Rs 200.

Also read:

https://blog.unocoin.com/how-can-you-get-bitcoins-in-india-7f1875fcd847

How can you get Bitcoins in India?

How can you get Bitcoins in India?

With a 300% increase in value in just a year (https://bitinfocharts.com/), Bitcoins are making their way into the world without much effort and are offering very attractive investment options. However, many of us remain new to its concept and workings, left wondering if it is safe to buy, invest, store and sell Bitcoins in India.

Where do you get started?

Are bitcoins legal in India?

First off before you dive in, you’d of course want to determine the legal status of bitcoins in your country. Even though countries like Japan and Russia are on the move to legalize the use of Bitcoins in their economies, India, regardless of being at the cusp of a digital revolution is yet to still officially recognize this crypto-currency.

“The creation, trading or usages of virtual currencies including Bitcoins, as a medium for payment are not authorized by any central bank or monetary authority. No regulatory approvals, registration or authorization is stated to have been obtained by the entities concerned for carrying on such activities,” the Reserve bank of India has said.

In March 2017, RBI Deputy Governor, R Gandhi had warned against crypto-currency circulation. “They pose potential financial, legal, customer protection and security-related risks.” he said. “Payments by such currencies are on a peer-to- peer basis and there is no established framework for recourse to customer problems, disputes, etc. Legal status is definitely not there,” he added.

However, Bitcoins are not unequivocally banned in the country. There’s simply no rule to regulate them yet — thus they are legal, since they haven’t been rendered illegal.

Use coupon “FBE200” during signup & grab free bitcoin worth Rs 200.

How can you obtain bitcoins in India?

Unlike paper currencies, bitcoins cannot be minted; they can only be mined or bought. There can only be 21 million Bitcoins that can ever be created/mined. At the time of writing this article, about 16.8 million or 80% of all the Bitcoins have already been mined.

Should you mine bitcoins or buy them? Our Bitcoin mining vs buying guide here should help you decide.

There are multiple ways to to buy bitcoins in India.

Cash

The first (and least convenient) method is to buy bitcoins in cash from other sellers. This method usually involves a direct meeting between both parties, and is less safer than the other option — buying online via your bank account.

Online

In India, bitcoins can be purchased online from exchanges like Unocoin. Unocoin provides services that include Android and iPhone apps that let you link your bank account for rapid transfers. They can also be bought by making a payment to Unocoin’s bank account.

To be able to store purchased or mined Bitcoins, a bitcoin wallet is needed — either on your device (computer or smartphone), or on the exchange you hold an account with. A high level of security is essential when storing bitcoins on online wallets, and exchanges usually make sure such measures are enforced.

Take Unocoin for example — the wallet addresses they use for offline storage are generated on a computer that has never and never will be connected to the internet. This serves as a crucial security measure against theft, loss and hacking. The address-private key pairs obtained are encrypted using AES-256, sealed in envelopes and stored in multiple safe deposit lockers.

Introducing Unocoin mobile application to buy, sell, send & store bitcoin on the go.

How does Unocoin work and what is the registration process?

As a verified Unocoin user, you will be able to trade, transact with, accept and store bitcoins. You can easily transact Bitcoins with your friends using Unocoin.

How you can get started with Unocoin:

  1. Registration: Visit the Registration page, and enter your email id along with a password you wish to set. You will now receive an email with a validation link. Please click on this link to verify your email id.
  2. Verification: Navigate to the ‘Edit Profile’ page on ‘Account Settings’ (menu on the left) and enter the requested details. Enter your Name, PAN number, phone number and your address. In the subsequent form, upload a scanned copy of your PAN card and a valid address proof with a photograph. You will receive a phone call verification from one of our team members for verification, once completed your account will be verified and ready for use.
  3. Verified Account: Once your account has been verified, you will be able to buy and sell 10 BTC/day with no limits on sending and receiving BTC. Regular and continued buy/sell transactions over a period of 60 days will upgrade your account to premium ‘Gold Member’ service with lower transaction fees and higher buy/sell limits. The last step would be to add your bank account details to your profile by visiting Account Settings > Bank Accounts.

Why should you buy bitcoins in the first place?

Despite the RBI’s reluctance to recognize bitcoins officially, bitcoin interest in India has not waned. After Prime Minister Narendra Modi’s demonetization act was announced in 2016, Unocoin saw a rise in its user base to 1,20,000 after demonetization.

The value of bitcoins is not expected to reduce as there are limited numbers of bitcoins that can exist. Moreover, the demand for these coins is only going up with large number of people showing interest in investing in this crypto-currency.

Given the population and increase in internet penetration of India, bitcoin can provide a great leap for the virtual currency usage.

Use coupon “FBE200” during signup & grab free bitcoin worth Rs 200.

Also Read:

https://blog.unocoin.com/what-can-you-do-with-bitcoins-e8d0943f2db9

What Can You Do With Bitcoins?

What can you do with Bitcoin?

In most ways, using bitcoins works the same way as using paper money, but with some key differences. Bitcoins do not exist in its physical form, as their primary form of existence is digital. They reside on your wallet or with any online service provider.

As bitcoins are currency, many businesses accept them. In fact, certain businesses accept only bitcoin as the mode of payment. That said, bitcoins are being used for multiple other purposes — and the rabbit hole goes pretty deep. Let’s dive into some of them.

#1 — Long Term Investment

The value of Bitcoins has soared up high in the last few years hitting many high records. In early May of this year (2017), the value of a single Bitcoin increased to almost $3000.

However, many are hesitant to invest in bitcoins due to its high volatility — it tends to fluctuate a lot in price. Also because Bitcoins aren’t backed up by precious metals or banks. Yet, even with all of this, investment in Bitcoins can be a worthwhile endeavor. You just need to have a slightly long term outlook.

Firstly, bitcoins are experiencing incredible growth. Though there have been large fluctuations, and even theft of funds that had taken place in the past, rapid price recoveries have been staged and bitcoins have come back to their place giving investors massive returns.

Secondly, the supplies of Bitcoins is fixed. 21 million bitcoins are scheduled for release in entirety, nothing more or nothing less. But the number of people getting into bitcoin trading is only going to increase. With limited supply and ever-increasing demand, the price can only go up. With a stable monetary base and a stable economy, the value of Bitcoins will never reduce.

Finally, Bitcoins may be a very effective way to diversify your investment portfolio. Bitcoins have sprung up into the world, making their way into the mainstream news today. Bitcoin is now being used for everyday transactions, international trading and for many other services. In turn, this has strengthened digital currency steadily.

“More and more investors are looking for unique opportunities outside the traditional arena,” writes Bobby Cho for The Street.

Use coupon “FBE200” during signup and get #freebitcoin worth Rs 200.

#2 — Short Term Trading

A long term perspective on bitcoins makes perfect sense. But for a trader, short term trades can be lucrative too.

Bitcoin trading can be profitable for both professionals as well as beginners because the market is fragmented with huge spreads and widely available margin trading. Also, compared to most other financial instruments, Bitcoin trading has limited barrier for entry.

Firstly, unlike stock markets, there are no official Bitcoin exchanges, because of which there is no official Bitcoin price creating huge arbitrage opportunities.

(Source: Statista, https://www.statista.com/statistics/326707/bitcoin-price-index/)

Secondly, Bitcoins are volatile. They are known for their rapid and frequent price movements creating quick opportunities for traders to reap profits at any point of time.

And finally, Bitcoins aren’t fiat currency, that is, their price isn’t directly related to its economy or policies of any country. So Bitcoins are used globally, making trading simpler.

Note: Bitcoins are subject to market risks. It is highly advised to put only the money that you can afford to lose.

#3 — Pay for Goods & Services

If you’re not getting your hands on them for pure investment, bitcoins can be spent for multiple things just like any other currency.

Physical goods can be bought with bitcoins. There exist a large number of online e-commerce sites that provide Bitcoins as a payment option for a variety of digital content like apps, games, videos, electronics, gadgets etc. across their online platforms. A few of them include Microsoft, Dell, Newegg, TigerDirect and much more such companies.

You could also be using bitcoins to obtain discounts. Purse is a peer-to-peer marketplace which match individuals wanting to buy items on Amazon at a discounted price with those wanting to buy bitcoins with a credit card or via PayPal. The service claims a potential discount up to 20% for bitcoin shoppers.

Accepting bitcoin payments for hotel bookings

Bitcoins could also help you pay for bigger ticket transactions like hotel payments and properties globally. This avoids the need for currency conversions and also the need to carry hard cash everywhere. Notably, Expedia has announced that it will now accept Bitcoin for all hotel bookings, making it the first major travel company to accept payments in cryptocurrency. Other hotels who accept Bitcoins for their booking include Holiday Inn (New York), One Shot Hotels (A Spanish Chain) and many others.

#4 — Charity

Finally, bitcoins can also be used for donations! There are a number of sites that provide the opportunity to donate Bitcoins for a good cause.


Much can be done with bitcoins, especially with its emerging values and opportunities. The big question is — “How will you use it?”

Whatever you plan to do though, you’ll need to get your hands on bitcoins in the first place to begin with, and Unocoin is the perfect place to start!

Use coupon “FBE200” during signup and get #freebitcoin worth Rs 200.

Also read:

https://blog.unocoin.com/bitcoins-mining-vs-buying-8610b1b0c0b6