Best Bitcoin Investment Strategies
The Rise of Bitcoin
People didn’t see Bitcoin coming: the idea seemingly came out of nowhere from “Satoshi Nakamoto” (we still don’t know for sure who that was!).
When people did hear about it, they generally ignored it. It was easy to earn (you could run the software on a laptop and generate coins), but it was technical, and the values of each Bitcoin were tiny. It felt like a “toy” currency.
Later on, it became synonymous with dodgy dealings, thanks to “Silk Road”, a digital black-market platform that was popular for hosting money laundering activities and illegal drug transactions (closed in 2013 by the FBI). Early on, there weren’t even exchanges: to buy and sell crypto in the UK, you had to go to a vape shop near Kings Cross station! Even early adopters had no idea of what Bitcoin would become, though they dreamed of it one day becoming a legitimate currency.
In the next few years, Bitcoin would get increasingly more respectable. The industry went from cancelling people’s bank accounts if they even sent money to a cryptocurrency exchange, to offering crypto on PayPal and through reputable financial establishments.
Nowadays, Bitcoin is getting more and more respectable, even if its tendency to change value very quickly hasn’t diminished over the years.
Handling this “volatility” is one of the keys to understanding Bitcoin and establishing an effective Bitcoin investment strategy: we’ll talk later about that.
For now, whenever you buy Bitcoin (or any cryptocurrency), there will probably be times that it’s worth less than you paid. And there might be times when it’s worth more than you paid, even if you did succumb to FOMO (“fear of missing out”) and buy at the top of the market.
How to Invest in Bitcoin
So, how would you start investing in Bitcoin? Well, buying some and storing it safely is a good start: you need to look for reliable companies that use hardened bank-grade security to protect wallets.
One great place to do that is AQRU. Even while Bitcoin is riding the financial rollercoaster, you can earn more of it every day, guaranteed (even during a downturn).
Sign up and Open an AQRU account
A journey starts with a single step and opening an AQRU account is the beginning of this journey.
Once you’ve done that, you’re immediately given a free 10 USDC (the crypto equivalent of 10 dollars), which you can then practice investing at up to 7% interest. Hey, free money is free money!
After that comes verification: to prove you’re who you say you are!
Part of the transformation of crypto is a journey to regulation, and AQRU takes its responsibilities very seriously.
So the next step is to show you’re serious, and as always, that means documents (sorry): usually a photo ID (a passport or driving licence) and a proof of address.
Once these are submitted, there’s a pause for verification, so have a cup of tea. Maybe three.
After you’ve been verified (you’re welcome!), you should also secure your account. With any financial account, you should not only have an email/password combination but add an extra layer of security. Our onboarding process at AQRU will guide you through choosing a suitable one.
Fund your account
The key to earning interest is having funds to earn interest on, alas, and this is the point where you send funds to AQRU to invest on your behalf (see the app for the current interest rates).
You have three options for getting funds into AQRU.
- Send in your existing Bitcoin. AQRU will provide you with a wallet address to send your Bitcoin to, and this needs to be entered into your Bitcoin wallet or at the exchange.
- GBP/EUR bank transfers, like any other bank transfer. The most important thing to remember about this method of payment is that the bank account needs to be in the same name as the name of the AQRU account holder. This restriction is common across the reputable industry. Once you’ve sent your funds in, AQRU can convert them to Bitcoin for you fee-free and at a great exchange rate, but you control the timing.
- Debit card purchase using MoonPay. This is more expensive than (2) because third-party fees apply, but you still get a good Bitcoin rate and the Bitcoin stashed straight into your AQRU account without any further fuss.
Invest in Bitcoin
To start earning interest in AQRU, press the “invest” button and commit funds. If you don’t do that, then you’re using AQRU as a wallet!
Once you press the button, you have the choice of:
- Ethereum – the Pepsi to Bitcoin’s Coca-Cola
- USD Stablecoin (currently USDC, which is a dollar-tracking virtual coin)
The current yield rates are displayed in the app and there are no tiers: all of your funds in any given investment account gets the same rate. For most investment accounts there is no lock-in period, so you can disinvest at any time, and even sell your Bitcoin back to regular currency.
The only fee charged by AQRU is a $20 flat fee if you withdraw your crypto to an external crypto wallet.
Watch your investment grow
AQRU’s interest is added every day, but you can see it mounting up in real-time. There’s something addictive about seeing your wealth go up in real-time to 15 decimal places!
Is Bitcoin a Good Investment?
In many ways, that’s the wrong question to ask. The big question is: is Bitcoin a genuine investment, and is it right for you?
Bitcoin’s history says yes. There’s a long-term upward trend (with a lot of volatility at shorter time periods, of course). There’s increased usage and availability of Bitcoin, as well as an acceptance worldwide that as a concept, it’s acceptable. It’s survived wars, fear, uncertainty and doubt and always sprung back. And, its inner workings are transparent, which is more than you can say for the stock market or investment brokers!
Bitcoin is also a liquid investment – that is, you can buy and sell it easily in a market that isn’t dominated by a few large players (called “whales”). If you have a million pounds of Bitcoin to sell… well, go for it.
Pros and Cons of Bitcoin Investing
Having established that by investing in Bitcoin you’re not throwing your money down a toilet, what are the pros and cons of investing in it?
- Bitcoin can be bought in small quantities from reputable sources, so it’s an easy way to enter the crypto market without bringing your house down.
- The potential for long-term gains is amazing, especially if you buy at the bottom of a market.
- It gives you something to talk about at parties.
- Bitcoin is volatile, though the hope is that one day it will be less so. The day-to-day volatility makes picking an entry point psychologically difficult. That volatility is also one of the reasons why yields on Bitcoin can be bigger than traditional finance.
- The price variation from day to day is emotionally quite difficult unless you simply switch off from worrying about it and regard it as a long-term investment.
- Working out tax on a Bitcoin investment can be a bit harder because Bitcoin is treated by some tax authorities as “property”, not currency – though this isn’t much different to the way stocks and shares are treated. But it does mean that you have to keep an eye on the rules.
- There is also no way, currently, to include a Bitcoin investment in an ISA.
- Talking about Bitcoin at parties often results in uninteresting conversations about Bitcoin and yachts. Avoid!
Tips for Investing in Bitcoin
Understand Risk Tolerance
Cryptocurrency is classified as a high-risk investment. Bitcoin is at the conservative end of that assessment, of course: it’s the biggest, most stable cryptocurrency and it’s not going anywhere.
Where on the spectrum are you between “risk-averse” and “risk-tolerant”? If you’re reading articles like this, it’s a fair bet you’re not a conservative investor, but you should never invest anything you can’t afford to lose.
Having said that, Bitcoin at least has shown a long-term upward trend. It’s increasingly difficult to “mine”, and there’s a fixed number of coins that will ever exist, so that bit was built in.
The emphasis here is on “long-term”, of course. If you’re willing to be patient, you can turn a high-risk investment into a medium-risk one, because you can choose when to exit and (hopefully) turn a profit.
Of course, it helps if your assets are working for you during that time, like they would be at AQRU, earning yield.
Diversify your portfolio
Diversifying your portfolio is more difficult than it used to be. New crypto investors are often surprised to find out that buying different kinds of cryptocurrency doesn’t result in safety against crashes: all of the major coins tend to move in the same direction at the same time.
“Aha! A mix of stocks/shares and crypto, that’ll do it!”
Well, the crypto market is now, according to the Wall Street Journal, much more correlated with the stock market than it used to be. Having a bundle of stocks and shares and crypto in the same portfolio isn’t necessarily the hedge against the market you might think. In the wider world, traditional finance investment tends to be inflexible, expensive, opaque and risky.
So, is there any way you can realistically diversify your portfolio?
Yes – stablecoins. At AQRU, there’s a stablecoin called “USDC” – US Dollar Coin, which is issued by a company called Circle. It’s a digital currency that is designed not to move against the US dollar, but which can still generate more yield/interest than traditional finance. USDC is backed with actual US dollars and is a good placeholder until the US gets its own Central Bank Digital Currency (CBDC).
When you transfer your funds to AQRU, you don’t have to put it all in Bitcoin: you can put some of it in an interest-earning USDC investment account. You can also put some in Ethereum. While Bitcoin and Ethereum tend to move in tandem, they both might generate different rates of growth in the future.
Start Small (it’s easy with AQRU!)
One of the nice things about crypto, compared with traditional finance, is that it’s a lot easier to get started, and it operates 24/7.
If you don’t have big lump sums (and let’s face it, who does these days?), then small but regular investing is the best option, and also takes advantage of what they call “Dollar Cost Averaging”: where you’re buying small amounts regularly at different prices, which evens out your overall risk.
For instance, if you bought Bitcoin in April at the rate of $35,000 per Bitcoin, and in May at $30,000 per Bitcoin, your existing Bitcoin would theoretically be worth less, but your May purchase would take advantage of the price drop to buy more Bitcoin.
AQRU’s minimum deposit is only 100 euros, so you can start reasonably small and build from there.
It wouldn’t be an AQRU blog post without mentioning the 100 USDC referral reward (T&Cs apply)!
It’s probably best to mention that AQRU also has a safety-first approach to risk and reward, which ensures long-term viability in a necessarily volatile market. AQRU uses its expertise to navigate the decentralised finance markets so you don’t have to, and you share in those rewards.
We also use bank-grade security to protect your deposits. Which is good to know.
Join for free today to start your Bitcoin investment journey!