How to invest in Bitcoin with limited funds? This is a question that many investors ponder. They recognize the significance of including BTC in their investment portfolio, but they are uncertain about the best approach.
First and foremost: why invest in Bitcoin?
Bitcoin is the most revolutionary asset of the decade, and it has been the highest performing investment in recent years. Despite being a relatively young cryptocurrency (less than 20 years old), Bitcoin possesses a quality that no other asset can match: it is a 100% decentralized form of money that is impervious to government interference.
As many are aware, governments have a tendency to accumulate debt. Most of them spend more than they collect, leading to an unfavorable situation and an insurmountable debt burden.
To tackle this issue, governments resort to devaluing their fiat currencies in order to repay their debts. They print copious amounts of money, resulting in rampant inflation: a decrease in the purchasing power of money. When you increase the supply of money, you diminish its value. This is the well-known law of “supply and demand.”
Consider the example of the US Dollar – in the past, 60 years ago, when it was still backed by gold, this fiat currency was highly esteemed as it was scarce and tied to the amount of gold the government possessed in its reserves. However, in 1971, US President Nixon eliminated this “constraint.”
From there, it all went downhill for the state currencies.
Understanding these facts, we can appreciate one of the greatest strengths of Bitcoin: it is a decentralized cryptocurrency that is not reliant on any government. Its network is distributed worldwide and is not susceptible to the influence of presidential or dictatorial politics.
Furthermore, another significant advantage of BTC is that its supply is limited to only 21 million units that can be mined. This creates a deflationary effect in the long term, in contrast to the inflationary practices favored by governments. This concept did not exist until the advent of Bitcoin.
Some economists project the price of Bitcoin in 15 years at $2,500,000.
I’m interested in Bitcoin, but how can I buy this asset?
There are two popular methods to invest in Bitcoin with little money (this also applies to larger investors): P2P – People to People (buying directly from person to person, often without relying on a central authority); and Brokerages (also known as Exchanges, where you can buy and sell Bitcoin through order books, making it the easiest way to acquire Bitcoin).
The simplest and recommended method for buying Bitcoin is through cryptocurrency exchanges. It is important to use a reputable exchange with high liquidity and, most importantly, robust security measures. Some popular exchanges in the market include Binance, Coinbase, and at Bitcoin Lovers, we recommend Bybit.
What is the minimum amount to invest in Bitcoin?
Many cryptocurrency exchanges have a minimum investment amount of around $10, which makes it an affordable option for anyone looking to invest.
How to invest in this cryptocurrency?
This is a crucial consideration for those who want to invest in Bitcoin and cryptocurrencies with limited funds. The most effective approach is to adopt a long-term perspective, considering a minimum investment horizon of at least 5 years.
In light of this, we recommend making regular monthly contributions with the amount you can afford to invest. It’s helpful to think in terms of dollars since cryptocurrencies are typically paired with that currency. You can adjust your investment plan based on your own financial situation.
Can you invest $40 each month? Don’t worry about the short-term fluctuations in Bitcoin’s price, as historically, the long-term trend of this asset has been upward. Consider setting a monthly investment goal, such as “every 10th of every month, I will invest $40 and have no intention of selling this asset for the next 20 years.” If the long-term trend of Bitcoin is upward, why would you want to sell it?
Remember, investment magic happens over the long term!
How much can you earn with $100 in Bitcoin?
Are you curious about the potential earnings from Bitcoin? Unlike stocks that may provide dividends, the cryptocurrency market operates differently. Your earnings will depend on the appreciation of the invested asset.
For instance, let’s say you buy $100 worth of Bitcoin when the cryptocurrency is priced at $20,000. In order to double your investment, the price of Bitcoin would need to reach $40,000. Do you follow?
This is why we emphasize the concept of long-term investing! Despite fluctuations in the short term, the overall trend of Bitcoin has historically been upward. So, regardless of whether you buy at $25,000 today or $35,000 tomorrow, over time, you can earn compound interest on your investment… after all, Bitcoin has historically appreciated over time.
Imagine when the asset is worth $1,000,000; How many times will you have multiplied your wealth?
Expand Your Horizons!
If you’re interested in investing in Bitcoin and have already started, you’ll be pleased to know that Bitcoin is just the beginning of the world of cryptocurrencies. This universe is filled with incredible opportunities, whether in the realm of decentralized finance or the emerging Web3.0.
The internet is rapidly evolving, and cryptocurrencies play a pivotal role in shaping this new landscape, making the entire ecosystem more inclusive and democratic.
Once you become familiar with this growing digital market and its potential, you may find yourself drawn exclusively to cryptocurrencies. There are amazing projects worth exploring, such as Ethereum, Chainlink, and Polygon, but those are topics for another article. The possibilities in this space are vast, and it’s worth considering expanding your investment horizons beyond just Bitcoin.