Should I Invest in Bitcoin? Is It Safe?

Last updated: 5/4/20

Bitcoin has been proclaimed dead over 350 times. However, here’s the truth about how profitable it’s been to buy and hold Bitcoin (aka Hodl) at any point in time.

Bitcoin Hodl Calculator

Hodling Bitcoin has been profitable for 3947 days out of a total of 4165 days (94.77%) Last updated: 05/31/20 11:05 AM ESTClick to view all 218 non-profitable days

Bitcoin Investment Simulator

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If you want a more detailed answer to the question “Should I invest in Bitcoin?”, keep on reading. Here’s what I’ll cover:

  1. The Many Forms of Investing in Bitcoin
  2. Buying and Holding
  3. Trading Bitcoins
  4. Mining Bitcoins
  5. Various Bitcoin Investment Schemes
  6. Frequently Asked Questions
  7. Conclusion – is Bitcoin a Safe Investment?

1. The Many Forms of “Investing in Bitcoin”

Before I begin, a word of advice:  Bitcoin is a very risky asset type. It is extremely volatile and even the most solid Bitcoin investment should be treated as a high risk investment.

For example, in the past Bitcoin’s price fell over 80% in the course of several months (this happened a few times throughout its existence).

Bitcoin is not a company or a stock, it’s a currency. If you still don’t understand what Bitcoin is, watch this video. As a currency, the basic form of investing in Bitcoin simply means buying the coin. However, there are additional  ways to invest in Bitcoin, as I will cover in the following chapters.


2. Buying and Holding (Hodling)

The most common form of “investing” in Bitcoin is buying the currency in hopes it will appreciate in value (also knowns as “hodling”, see the origins of the term here).

If you do decide to Hodl, the most important rule of thumb is this:

Don’t take anyone’s advice about what will happen with the currency. do your own homework, learn about Bitcoin and come to a conclusion for yourself.

A few pointers for buying and holding Bitcoins:

  1. Never invest more than you are willing/able to lose – Bitcoin is a very risky investment and you should keep that in mind at all times.
  2. After buying Bitcoins, make sure to move them into your own Bitcoin wallet and never leave them on an exchange. If we’re talking about substantial amounts, my personal recommendation is to use a hardware wallet. If you can’t afford a hardware wallet, try a paper wallet.
  3. Make sure to buy Bitcoins only from Reputable Bitcoin exchanges. Sometimes paying a little extra is worth the security and piece of mind.
  4. Use Dollar cost averaging (DCA) – This means that you don’t buy all of your Bitcoins in one trade but instead buy a fixed amount every month, week or even day throughout the year. This way you average the price over the course of a whole year.

Here’s a short video to explain DCA:


3. Trading Bitcoins

Bitcoin trading is different than buying and holding. When you are trading Bitcoins it means that you are actively trying to buy Bitcoins at a low price and sell them back at a higher price in relatively short time intervals.

Trading successfully requires knowledge and practice. The trading market is occupied by very large players who are just waiting for newbies to come in and throw their money away by trading aimlessly.

Here’s our beginner’s guide to Bitcoin trading:


4. Mining Bitcoins

For the past few years mining Bitcoin is profitable only if done on large scales. This means you will need to get expensive mining equipment and have access to free or very cheap electricity.

From my perspective, it’s much more cost effective to buy Bitcoins with this money instead of using it to buy mining equipment. If you want to learn more about mining watch this video:

Cloud mining

You may have heard of all sorts of sites that allow you to mine Bitcoins through the web. This is known as cloud mining and from what I’ve seen these sites fall into one out of two categories:

  1. They are complete scams that will run away with your money and will never actually use it to mine Bitcoin.
  2. They are not scams, but they are bad investments since you will probably get more Bitcoins if you just use that money to buy Bitcoins instead of paying for the service (e.g. Genesis Mining, Hashflare).

If you want to learn more about my take on cloud mining, read this post.


5. Invest in Bitcoin Doublers / Grow your Bitcoins / HYIPs

Almost every other day I get a question about a site or company that claims to double your Bitcoins, give you insane daily interest on your Bitcoins or help you invest them in some sort of complex and obscure ponzi scheme.

These sites can be categorized mostly as scams or HYIPs (high yield investment programs).

What these sites usually do is they take money from people around the web with the promise to give them good returns. They will then start off by paying these returns through money they get from new sign ups and create a big buzz around the site.

Usually they will also have some sort of referral program so that users can bring in their friends.

This will go on for around 3-4 months until one day the website will just go offline and the money will be gone. No more payments will be made and a lot of people will get mad that they got scammed.

I have reviewed many Bitcoin investment sites in the past 3 years (e.g. Bitconnect,  USI Tech and more) and I have yet to find a site that I can say is legit or safe to invest in.

Any site that promises you something that is too good to be true is probably just a facade for scammers trying to steal your coins.

How can you find out if a site is a scam for yourself? Easy, use my Bitcoin scam test tool.

STAY AWAY FROM SITES THAT CLAIM THEY WILL DOUBLE YOUR COINS OR GIVE YOU DAILY INTEREST ON THEM.


6. Frequently Asked Questions

How do I Make Money with Bitcoin?

Aside from what I’ve mentioned in this post there are several other ways to make money with Bitcoin such as:

  • Micro earnings
  • Owning a faucet
  • Signature campaigns
  • Affiliate programs
  • Gambling
  • Writing about Bitcoin
  • Bitcoin related services
  • Bitcoin Lending H
  • Bitcoin forks

You can read about these methods here.

How Much was a Bitcoin Worth in 2009?

On October 12, 2009 Martti Malmi, a Finnish developer that helped Satoshi work on Bitcoin, sold 5050 Bitcoins for $5.02. This gave 1 Bitcoin the value of $0.0009.

Can You Convert Bitcoin to Cash?

Yes, Bitcoin can be converted to cash. If you’re looking for physical cash you can find buyers through Paxful or HodlHodl. If you’re just looking to convert Bitcoin into fiat currency (i.e. USD, EUR, Etc.) there a variety of Bitcoin exchange available.


7. Conclusion – Should You Invest in Bitcoin?

By now you can probably see that there is no simple answer to this question. It’s not just a matter of should you invest, but also a matter of how to invest.

Like I said in the beginning, start by educating yourself (you can use our free 7 day crash video course). Learn about the currency, what affects it, what are its advantages and disadvantages, etc.

After you feel you’ve acquired some basic education, it’s time for you and you only to answer this question. When you start out, start small and learn as you go. You’ll probably make some mistakes, everybody does.

You can consult with others and read information online but never follow someone’s advice blindly.

Have you had any experience with different investments in Bitcoin? If so, I’d love to hear about it in the comment section below.

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Simon
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Simon

Hi it is safe to use luno app for to buy and sell Bitcoin

Simon
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Simon

Hi
I have Invest in Bitcoin in 2018 then in 2019 my Bitcoin wallet website was blocked when i ask my upline said Satoshi got arrested so is it true .

Eddie
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Eddie

Hi l invested with CTmarketonline.com a UK registered company and reading about all the scams l wander if l made the right choice?

Eddie
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Eddie

Hi l need to know if CTmarketonline.com is a legit trading company (UK based) …everything seems in order to me.. they ask you to open a Bitcoin wallet, link you to a trader and even have a live chat where you can ask questions and get answered …..I have invested and need to pay a signal fee before they release my profit

myraf
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myraf

Be Aware of this two scam investment website: crypt-profits.net/ and yengtoroinvest.com/ I Invested 500$ and reinvested it for 3 days and the money got to 1213$. I told them that i wanted to withdraw. They told me i have to Pay 20% of my money before i can withdraw, which was 242$. I paid it and the following they , i wanted to withdraw and they told me i have to pay additional 500$ . I told them i will not pay any money again. And that ends it. I never withdraw my money. So i advise everybody to stay… Read more »

Muhammad
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Muhammad

Thank you so much I really loved your writing and I came here after 2 weeks of reading from all different materials and thinking day and night and this is exactly my conclusion.

You almost summarised all the new things that I discovered in these 3 days.

Thank you very much

Ahsley
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Ahsley

A friend of mine referred me to tradeflex.org. They claimed they are registered under cysec but has anyone here used their services?

Irish
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Irish

Hello! My friends use PlusToken, by the looks of it, they’re quite satisfied with it. I just want to ask if you think it’s a legit cryptowallet?

Todd Blake
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Todd Blake

Have you heard about bit-gain.com?

Silvester West
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Silvester West

Hey, is bitcoinminingoptions.com a legit site? Kindly help me.