If you are willing to take on the risk, you only need a digital currency account, like Coinbase, CEX.IO or Kraken to purchase a bitcoin. 7 And it looks like a bitcoin- associated exchange-traded fund could be approved this year. In 2020, more investment companies began to embrace Bitcoin, and many large, household-name companies started to buy and hold bitcoins as assets, adding to Bitcoin’s credibility. The Bitcoin futures exchange allowed investors to participate in the rise and fall of its value without actually having to buy the currency. Depending on what people are willing to pay for these assets, futures contracts help determine the value of the asset. Futures contracts obligate a buyer or seller to buy or sell a certain type and amount of an asset (like gold) at a certain price. 6 Let’s break down what that means: Futures exchange is fancy investment lingo for a central marketplace where you buy and sell futures contracts.
So why is Bitcoin such a buzzword? In 2017, Bitcoin began building credibility when a large financial firm created a futures exchange for the currency. 5 All that, combined with the fact Bitcoin is not regulated by any bank or tied to any country, makes for a scary combination. Both bitcoin mining (don’t worry-we'll explain that later) and trading are handled anonymously, making the cryptocurrency scene prime for cybercrimes, like phishing and blackmail schemes. They pay electronically using a computer or mobile app, sort of like sending money via PayPal. How Does Bitcoin Work?īitcoin users exchange their digital “coins” for goods and services or trade them for cash. 4 But none are as accepted as their prototype, Bitcoin. These include Ethereum, Ripple’s XRP, Litecoin, Tether and Bitcoin Cash (a totally different currency, despite its namesake). There are currently over 2,000 other cryptocurrencies floating around the internet, and most play off of Bitcoin’s concept: anonymous and nationless digital cash.
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Market chaos, inflation, your future-work with a pro to navigate this stuff. Like gold, bitcoins are worth what people are willing to pay or exchange for them. It’s all done over the internet using complex computing and coding. There are no bills to print or coins to make. What Is Bitcoin?īitcoin is the most widely known type of cryptocurrency-aka digital money. So, is bitcoin just another get-rich-quick scheme or a legit investment worthy of your hard-earned cash? Let’s talk about it. Even Wikipedia takes donations in bitcoin. 2 And it’s gaining popularity with bigger businesses like AT&T, Microsoft and Overstock.
Businesses are jumping on the Bitcoin bandwagon too, with more than one-third of small- and medium-sized businesses accepting it as payment. Just last week, the value of the cryptocurrency market dropped by $150 billion in 24 hours! 1Įven so, investors have been looking for ways to make money on Bitcoin since it was created in 2009. Bitcoin, and digital currencies like it, are best known for two things: They’re really hard to understand and their value is all over the map.
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