1 Why invest in Bitcoin?
One of the main reasons for investing in Bitcoin is its limited offer. Unlike fiduciary currencies, which can be issued without restriction by central banks, the Bitcoin protocol establishes a maximum of 21 million units. This scheduled shortage makes it comparable to gold in terms of Value reservebut with advantages of the digital environment.
In addition, Bitcoin is decentralized. It does not depend on any government or central entity to operatewhich protects it from financial censorship. Its network is supported by thousands of nodes and miners worldwide that validate transactions and ensure the system collectively.
In recent years, large financial institutions, investment funds and companies have begun to include Bitcoin in their balance sheets. This has increased its legitimacy and has opened opportunities for more people to access it through regulated products, such as ETFs or negotiable investment funds. However, It is also important to note that Bitcoin remains a volatile asset, which implies risks to those who seek short -term profits.
2 What is needed to start investing in Bitcoin?
Before investing, it is essential to understand Bitcoin’s foundations: What differentiates it from other currencies, why it is scarce, how its decentralized network works and what risks entails. Having basic financial education and a clear understanding of Bitcoin’s volatility is crucial to avoid impulsive or poorly informed decisions.
It should also be taken into account that Bitcoin is not only an asset, but A technology with deep social and economic implications. This makes it important to adopt a long -term vision when investing.
It is also advisable to have an investment strategy. Due to market volatility, many people opt for strategies such as Dollar-Cost Averaging (Dca), which consists of investing a regularly fixed amount, regardless of the price. This helps reduce the impact of market fluctuations in the short term. We recommend informing you about this and other strategies, so that you choose the one that best suits your needs.
3 How to invest in Bitcoin?
Today there are multiple forms of exposure to this digital asset, each with different levels of risk, complexity and degree of control. Next, we explain the main options to invest in Bitcoin:
Companies with higher Bitcoin holdings
The first BTC companies acquired to date are: Microstrategy, followed by Mara Holding, XXI, Riot Platforms, Inc., Metaplenet Inc., Digital Holdings Marathon, Cleanspark Inc and Tesla Inc.
Bitcoin direct purchase
The most sovereign way to acquire Bitcoin is through direct purchase, that is, buy it from another person without going through a centralized exchange. This can be done in face-to-face meetings, or through peer-to-peer platforms such as Bisq, Hodlhodl or Easybit, which allow connecting buyers and vendors directly. This method offers greater privacy and decentralization, although it also requires basic knowledge of safety and verification.
Buy through centralized exchanges
This is the most used methodespecially for those who are starting. It consists of registering on trading platforms, preferably recognized and well reputed such as Coinbase, Binance, Kraken or Bitso that allow Bitcoin to buy with local currency through bank transfer, card or other methods.
While exchanges facilitate access, users must understand that, By keeping the funds on these platforms, they do not control their private keys. That is why it is recommended to transfer the bitcoins to a personal Wallet, preferably a Wallet hardware, once the purchase has been made.
Invest in companies linked to Bitcoin
Another option is to buy shares of companies that have direct exposure to the bitcoin ecosystem. Some examples include: Strategy, which maintains thousands of BTC in its treasury; Coinbase, one of the world’s largest exchanges; Digital Marathon or Riot Platforms, dedicated to Bitcoin mining.
This mechanism allows to invest through traditional stock markets, although it entails additional corporate risks.
Investment funds in Bitcoin (ETFS and Trusts)
The funds quoted in the stock market (ETFs) They allow exposure at the price of Bitcoin without buying it directly. In the United States, cash ETFs such as Blackrock (Ibit) or Fidelity (FBTC) have gained popularity for their ease of access and regulatory support.
However, remember that these instruments do not grant sovereignty on the funds, since the investor does not have the bitcoins directly.
Bitcoin trading
Trading consists of buying and selling Bitcoin actively, taking advantage of market volatility to obtain short or medium -term benefits. It can be done in centralized or decentralized exchanges, using tools such as graphics, limited orders or even leverage.
Nevertheless, Trading can be highly risky without proper preparation and discipline. It is recommended that beginners exercise their skills and deepen their knowledge on the use of risk control tools in a test network (testnet) before trading on the commercial platform.
Another option for little experienced beginners and traders, which Mitigates the risks of Bitcoin trading and other cryptocurrencies, it is copy trading. This consists of copying the trading operations of an expert for a percentage of the profits; Although there is no guarantees that such profits occur, if a greater probability.
Bitcoin mining
Mining consists of contributing to computational power to validate transactions on the network and receive rewards in BTC. Today, it requires specialized hardware (ASICs) and access to cheap energy to be profitable.
Although it is no longer viable for most people from home, some choose to join mining pools or hire mining in the cloud, although this last option carries risks of fraud. Therefore, we always recommend educating and informing yourself correctly before starting to invest.
This investment mode in Bitcoin companies allows investors Have Bitcoin exposure through a usual brokerage account.
Investors who choose this modality do not have bitcoins, but actions that monitor the price of this cryptocurrency, which are not in charge of the operation or custody of the BTC.
On the other hand, it is possible that the price of the shares varies due to a management action of the company, without relation to the price of Bitcoin. This adds a risk to investment through the actions of Bitcoin companies.
4 How to manage the risk when investing in Bitcoin?
Next, we explain some strategies to minimize the risks when investing in Bitcoin:
Just invest what you are willing to lose
As Bitcoin is a speculative asset, some experts recommend that you do not represent an excessive part of your portfolio. It is recommended to allocate a moderate percentage of the total capital invested, following the following rule for your financial stability: “Never invest more than you can afford to lose”.
Store your bitcoins safely
One of the most common risks in the world of cryptocurrencies does not come from the market, but from the bad custody of the funds. It is essential to understand the difference between an exchange to have control of the private access keys to your bitcoins and have them.
In general, it is recommended to wear cold wallets (Cold Wallets) to save long -term funds. Activating two factors authentication (2FA) and maintaining safe backups is also key to avoid losses.
Avoid leverage if you are a beginner
Financial leverage allows to operate with more money than you really own, but considerably increases the risk. Many platforms offer this option to trading with Bitcoin, but can lead to rapid settlements and total losses.
Investigate thoroughly (do your Own Research)
Never invest in Bitcoin (or any cryptocurrency) just because someone told you or for the “fomo” (fear of missing something). Understand the underlying technology, its purpose, its value proposition, market capitalization, supply, demand and factors that can influence its price.
5 How are taxes in Bitcoin investments?
If you are considering investing in Bitcoin or another digital asset, it is important that you know how taxes are applied in this type of investment. In most nations, Cryptocurrencies are considered financial assets or properties, not legal tender coins. This means that the capital gains of cryptoactive ones for both their revaluation and for profits in their trade (trading) may be subject to tax rates.
In the United States, for example, IRS considers cryptocurrencies as property. Profits are subject to capital gains tax (0-20% for long term, up to 37% for short term). In this case, each transaction must be reported in the Form 8949.
On the other hand, in Spain cryptocurrencies are taxed as Patrimonial gains In the IRPF (19-26%, according to the amount). They may also be subject to the equity tax if the threshold is exceeded. It is mandatory to declare them in model 720 if you have more than 50,000 euros abroad.
Also, in Mexico, cryptocurrencies are treated as Intangible assets. Sale earnings are taxed as capital gains in the ISR (up to 35%). Mining income is considered ordinary income. While, in Argentina. cryptocurrencies They are subject to the Income Tax (5-35%, depending on the case) and the Tax on Personal Assets if you exceed the minimum non-taxable. Since 2022, there is a specific tax for cryptoactive abroad.
If you want to learn more about this topic, we recommend you read this article entitled «What is a Bitcoin Exchange and what is it for?” We also invite you to read and share these articles from our cryptopedia.
