What is bitcoin and how does it work?
Bitcoin is a type of cryptocurrency, which is a digital asset.
Paddy Osborn, Managing Director and Academic Dean at London Academy of Trading, told Express.co.uk: “Bitcoin is essentially an electronic currency. Individuals can exchange FIAT currencies (such as British Pounds) for bitcoins and these are stored in a “digital wallet”.
“You can buy and sell bitcoins (or a fraction of a bitcoin) or send them to other people.
“The value of bitcoin fluctuates in a similar way to other ‘real world’ currencies, although the fluctuations in the price of bitcoin can be extremely volatile.”
“While bull runs in unregulated instruments like cryptocurrencies might be tempting, they are still risky.
“When it seems like everyone around you is profiting on a trend, assets like these can lure investors – particularly novice investors – into a false sense of security.
“For all the winners of the novel ‘casino approach’ to investing, there are also losers – and lots of them.
Rather than investing in cryptocurrencies with the hope of making money quickly, experts suggest there are better ways to make money that are longer-term.
Mr Crookall added: “For all the talk about returns, investors should equally consider risk.
“Is their portfolio prepared for the next crash? Taking a diversified, long-term approach to investing — in assets that are appropriate for them — should be the first step for any investor, rather than risky single-stock speculation. It will certainly help you sleep easier at night.”
This post originally appeared on Daily Express :: Finance Feed