While most professional investors have not taken the plunge into the world of investing in digital assets like bitcoins, some private individuals and groups have. One such person is John Morrison, managing director of investment firm WMS, which has offices in London and Hong Kong. Mr. Morrison was one of the first high profile investors to publicly discuss the possibility of putting his money in the digital assets like bitcoins. Now he also takes part in the venture by hosting a monthly investing event with other investors called the Virtual Mining Conference.
Unlike stocks, bonds, mutual funds and other common investments, investing in bitcoins and other cryptoshares is a very risky investment option. The reason is that nothing concrete has yet been done to increase the value of the digital assets like the bitcoins. In fact, the value of the bitcoins has decreased by a staggering 95% over the last year. However, according to statistics, only two out of ten hundred investors actually converted their shares of bitcoins to cash.
Fortunately, however, for those who are still interested in putting their money in this highly volatile asset class, there are concrete strategies for safe and profitable investing in the virtual currency. One of these strategies is to convert a portion of one’s investments in the Bitcoin to cash. This conversion is technically known as “hedging”.
The second safe strategy for investing in the volatile asset class is to open a brokerage account and use a brokerage firm’s services to invest in the currencies of various countries. For instance, if an American investor wants to invest in the gold and copper coins, he could open a gold account and invest in these metals through a brokerage firm. Once he gains interest in a particular pair, he could then open a new brokerage account and invest in the corresponding currency. This is perhaps a more conservative way of dealing with the problem of how to invest in the bitcoins, as compared to the more conventional approach of putting money in a bank account. This method, however, involves a high risk of holding onto the investment for some period of time before eventually cashing out.
The third safest way to invest in the bitcoins is to purchase ETFs or mutual funds that are managed by professionals who deal primarily in the more stable and secure metals and coins. Although the premiums involved in such fund may be higher than the premiums in a standard investment portfolio, most investors find that the profit margins are much higher. Moreover, since ETFs trade on major exchanges, they provide the convenience of having their stocks and shares listed on a prominent and well-known exchange. The volatility of the currencies traded on these exchanges may also prove beneficial to investors who want to make regular investments in these highly volatile but potentially lucrative commodities.
Finally, if you want to learn how to invest in Bitcoin, consider looking into the options for exchanging barter services between individuals, groups, corporations, and even governmental entities. Bartering has been used for centuries across many different cultures as a means of sharing both products and services. Today, it is used in much the same way, only now the process is being simplified and made easier by the Internet. By exchanging virtual items like e-keys, smart phones, USB drives, and other digital devices that have come to popular use, investors will be able to tap into this growing and powerful exchange market.