Global attention has recently focused on the potential of Bitcoin futures as an investment opportunity. This cryptocurrency has been around for less than a decade, but it has already made a considerable splash in global economics. With 18.5 million Blockchain.info wallets in existence, along with 12 million Coinbase users, Bitcoin as a potential asset in your investment portfolio is something one should definitely consider.
Bitcoin Futures: How To Invest
What Are Bitcoins?
Bitcoins are a form of cryptocurrency. They were developed in 2009 by an anonymous person who used the name Satoshi Nakamoto. The system allows people to trade their Bitcoin without banks, or any other third-parties and can be used to purchase things or even trade and buy globally. The maintenance of the system comes from a public ledger that lives on the internet. The protocol that runs the Bitcoin system is open source, with developers having the capacity to improve and modify it from around the world.
Without ties to any particular country, Bitcoin can be bought and sold using standard, fiat currency and then used similarly to digital money. However, Bitcoin does not carry insurance from the FDIC. They are stored in a digital wallet and are not subject to such regulation.
How Can Bitcoin Be Traded?
On December 10, 2017, the CBOE Futures Exchange, LLC first began to trade in Bitcoin futures. Since the birth of Bitcoin around 2009, the currency has been largely unregulated. With the digital currency now being traded publicly, users anticipate greater transparency and liquidity in the system. The prospect of trading with Bitcoin appeals to many people because of how much the cryptocurrency has increased in value just over the past few years. In just eight years, it went from a value of $0 to as high as over $19,000.
A limit also exists regarding the number of Bitcoin that can be created. The protocol is set up to half the number of new coins added to the supply every 4 years, with the last coin coming into existence in around 2140, meaning that there will never be more than 21 million in circulation. Given that the popularity of the currency has also been increasing around the world, the growing interest in the finite amount of currency available lends strong support for the investment.
As the popularity of these coins has increased, governing bodies have also been paying attention. The IRS declared in 2014 that Bitcoins would be treated as personal property for taxation purposes.
Bitcoin as an Investment for You
Bitcoin does carry some advantages for investors. Since the currency does not have any ties to other investment options or global fiat currencies, proponents say they will not experience the drastic fluctuations that can occur during a global economic crisis. This can help investors fully diversify their portfolios to maximize their gains.
Bitcoin remains an object of interest for many people interested in investments. Although it has become increasingly popular around the world over the past several years, with the recent introduction of Bitcoin futures to the general market, there will likely be even greater interest among investors to try out this cryptocurrency in their investment portfolios.
Have you tried investing in Bitcoin futures? Let us know in the comment section below.