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How to make money by investing in Bitcoin? Is 2022 still a good time to invest in Bitcoin?

2022-07-18

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For many investors investing in Bitcoin, 2022 will definitely be a year of mixed feelings, as of July 2022 Bitcoin price is only half of November 2021. But the fact that Bitcoin has plummeted is not a bad thing for all Bitcoin investors.

Different Bitcoin investment methods will have different attitudes in the face of the fall in Bitcoin price. Is it still suitable to enter Bitcoin in 2022? We will tell you how Bitcoin plays? How to make money investing in Bitcoin through the downtrend of Bitcoin?

What is Bitcoin good for? Can bitcoin be exchanged for cash?

Bitcoin transaction volume 2017-2022 (source: statista.com)

Before getting to know Bitcoin for the first time, you can first understand what Bitcoin can do. First of all, let’s clarify an answer. Bitcoin can be exchanged for cash. There are two main ways to convert Bitcoin into cash and finally transfer it to a bank account. They are using third-party exchange brokers or peer-to-peer trading platforms in exchange for cash.

As can be seen from Bitcoin's 2017-2022 transaction volume data, except for abnormal months, Bitcoin's monthly transaction volume has remained at 300,000 transactions. The ultra-high transaction volume also supports the transaction properties of Bitcoin. Due to its scarcity, Bitcoin is increasingly viewed as a token equivalent to gold.

How does Bitcoin play? What are the ways to invest in Bitcoin?

Source: Pexels (Karolina Grabowska)

As bitcoin is recognized by more and more people, bitcoin has gradually become a popular investment channel, and people who make money through bitcoin trading have also confirmed the unique value of bitcoin as an investment product. How to buy bitcoin? At present, there are two main ways to invest in bitcoin in the market, namely spot holdings and bitcoin contracts.

Spot Trading Bitcoin

The price of a bitcoin in 2010 was only $0.09, but today the price of a bitcoin is as high as $20,721.6, an increase of ten million times. Spot trading bitcoin is generally held for a long time, agreeing with the value of bitcoin, buying at a low price of bitcoin and selling at a high value, this method is usually easy to get caught. In addition, if you hold bitcoin for a long time, you must Take the risk of cyber-attack on your virtual wallet.

On the other hand, the price volatility of Bitcoin is very little correlated with traditional markets. In other words, Bitcoin can be used as one of the portfolio investments against traditional market risks.

All in all, if the price of bitcoin rises, investing in spot bitcoin can make money, and the poor performance of bitcoin in the market in 2022 is the last fact that bitcoin spot investors want to see. Investing in bitcoin spot focuses on the entry time, and the risks that the late entrants have to bear should be greater.

Invest in bitcoin contracts

Bitcoin contract is a financial derivative made by institutions around Bitcoin. Profits are made by predicting the rise and fall of Bitcoin prices, so no matter whether the Bitcoin market is bullish or bearish, there is always someone who can make money through Bitcoin contracts.

At present, the more mainstream Bitcoin contract is the Bitcoin CFD, which is an investment method to invest in the trend of Bitcoin through leverage and margin.

To put it simply, investing in bitcoin contracts is not affected by the fall in bitcoin prices and will not lose money, so bitcoin contracts are considered by many to be the first choice for medium and short-term small investments. By understanding the future movement of the Bitcoin market, its returns can be improved.

Many people do not have the time and technology to track the market, so in the fluctuation of the market, they may miss the opportunity to make money. This is where many investors think that investing in CFDs is troublesome. Therefore, some licensed contract CFD exchanges, such as CM Trade, will provide a copying function. As long as the copying price is set, even investors who do not have enough time for analysis can easily profit. (Refer to the specific usage introduction link)

How does Bitcoin make money? How ordinary people should invest in bitcoin

We have introduced the main investment methods of bitcoin. The principle of making money by investing in bitcoin spot is very simple. It is to collect bitcoin through mining machines, or buy bitcoin through a third-party trading platform, and wait for its price to reach its ideal price. sell.

For those who want to make money through Bitcoin contracts, they need to understand the working mechanism of virtual currency CFDs.

CFDs are very common financial instruments in Europe, mainly used for hedging investment risks, so they are also suitable for general investors to optimize their investment portfolios.

Bitcoin contracts can be divided into long contracts and short contracts. As an ordinary investor, if I think Bitcoin will rise in the future, I will buy long contracts, and on the contrary, it will be short contracts. Profits can be made as long as Bitcoin’s price action matches the predictions.

Generally speaking, CFDs involve leverage, spreads and margin. As a simple example, if you choose a leverage of 1:10 and want to invest $1,000 worth of Bitcoin, investors only need to provide a $100 margin. The broker or institution pays the trader if the investor buys a contract that correctly predicts the movement of Bitcoin and chooses to close the position. If it closes at a loss, the broker charges the trader the difference.

The above is the working mechanism of Bitcoin CFDs. If you want to know more CFD trading skills, you can create a account of CM Trade for free and subscribe to the investment strategy column of CM Trade.

Is 2022 still a good time to invest in Bitcoin?

Our previous article on Bitcoin's 2022 predictions detailed Bitcoin's price action over the past decade, as well as many analysts' views on Bitcoin's future.

Based on our continuous tracking of the bitcoin market, we believe that 2022 is not a good opportunity to invest in bitcoin spot, because bitcoin has maintained a downward trend since 2022. Entering bitcoin spot at this time will bear a lot of money risk.

We recommend that investors who want to enter Bitcoin in 2022 can try to buy Bitcoin contracts. Our analysts will provide timely market reports and trend analysis for registered members, so as to ensure that investors can get the best opportunity to make money.

In conclusion

Strong regulation by governments around the world, extremely volatile price volatility and volatile investor sentiment will continue to weigh on the future of digital currencies. However, with the advent of WEB3.0, Bitcoin will become easier to access, and its popularity will continue to increase, which also makes us firmly believe that Bitcoin is a valuable investment product.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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