The cryptocurrency market experienced significant movement following Donald Trump’s inauguration, which traders had closely anticipated. 

The cryptocurrency market experienced significant movement following Donald Trump’s inauguration, which traders had closely anticipated. His promise to establish the United States as the "crypto capital of the planet" and create a strategic Bitcoin reserve resonated positively with market participants. Bitcoin’s market capitalization surged, reaching an all-time high of $109,300 just before the inauguration on Jan 20, 2025. This surge illustrated the optimistic crypto market sentiment surrounding Trump's administration and its potential influence on cryptocurrency regulations.

However, this rally was tempered by a common market phenomenon known as "buy the rumor, sell the news." Following the inauguration, many traders who had invested in anticipation of the event sold their holdings, leading to a price decline. This reaction highlights the volatile nature of cryptocurrency markets, as excitement can quickly turn into profit-taking.

World Liberty Financial and Ethereum Accumulation

In related news, World Liberty Financial (WLF), a cryptocurrency venture associated with Trump and his family, made headlines by significantly increasing its Ethereum (ETH) holdings. From Jan 17–19, 2025, WLF acquired 55,247 ETH, bringing its total to 56,332 ETH, valued at approximately $181.6 million at the time of the report. This acquisition drew attention due to its substantial scale and timing, occurring just days before the inauguration.

WLF's wallet also held a diverse array of assets, including Wrapped Bitcoin (WBTC) and USD Coin (USDC), indicating a strategic investment approach. The rise in attention to WLF's holdings reflects a growing interest in institutional investment in cryptocurrencies, especially in the context of a pro-crypto administration. While Ethereum's price action has been somewhat disappointing compared to that of other altcoins, the accumulation strategy by WLF suggests confidence in Ethereum's long-term potential.

The report also highlights Solana’s remarkable performance, as SOL reached an all-time high of $295 on January 18, 2025. This surge was largely driven by the launch of an official TRUMP meme coin on the Solana network, which generated significant investor interest. The TRUMP meme coin achieved a market cap of $14.92 billion within two days of launching, illustrating the power of meme culture in driving market activity.

The correlation between the TRUMP meme coin's popularity and Solana's price rise indicates how new products can influence established cryptocurrencies. Despite the initial hype surrounding the meme coin, Solana has shown resilience, bouncing back above $258 after the inauguration, suggesting a robust underlying demand.

Looking toward future developments, the report discusses the recent filings for cryptocurrency exchange-traded funds (ETFs) with the U.S. Securities and Exchange Commission (SEC). These filings include proposals for Bitcoin (BTC), Ethereum (ETH) and various meme coins, signaling a potential shift toward mainstream adoption of cryptocurrency-based financial products. The anticipated pro-crypto policies under Trump’s administration could play a crucial role in shaping the regulatory framework for these ETFs.

The SEC’s response to these applications will be a significant indicator of how institutional investment in cryptocurrencies may evolve. Should these ETFs gain approval, it could lead to increased demand and price volatility, particularly as traders react to the outcomes of these regulatory decisions.

Advanced

Intro to Santiment.png

Bybit x Santiment: ETH Faces Pressures as SOL, XRP, Meme Shine

Our weekly crypto derivatives analytics report delves into macro events, the current state of crypto and trading signals from spot trading volume, and futures, options and perpetual contracts.

Trump's inauguration on Jan 20, 2025 was preceded by the launch of two meme coins from the Trump family, TRUMP and MELANIA, which quickly garnered billions in market capitalization. Speculation about a strategic Bitcoin reserve being included in the executive orders signed on the first day of his administration led to a significant bullish shift in derivatives market positioning. This shift resulted in an inversion of the term structure of volatility, increased funding rates on long positions and a tilt in short-tenor volatility smiles toward calls. However, when the anticipated bullish announcements didn’t materialize, implied volatility levels decreased, even as realized volatility increased. Despite this, the bullish skew toward out-of-the-money (OTM) calls persisted.

In the perpetual markets, funding rates remained consistently high across almost all assets, continuing beyond the inauguration event. In the options market, realized volatility surged to post-election highs, even as implied volatility levels fell due to an overestimation of the significance of inauguration day for crypto. Overall, positioning across all tenors remained bullishly tilted.

Please check out the report’s highlights.

During the inauguration weekend, perpetual swap trade volumes hit their highest levels in over a month as traders positioned for expected crypto-friendly executive orders. Notably, SOLUSDT perpetuals experienced a significant surge in activity, reaching new all-time highs and a spike in realized volatility. Trump's launch of the TRUMP meme coin on Solana DEXs allowed Solana’s network to surpass competitors in fee generation, highlighting the symbolic choice of a sitting U.S. president to launch on Solana instead of Ethereum.

Perpetual swap funding rates saw minimal repricing despite the lack of significant announcements on inauguration day, remaining at neutral-to-bullish levels across all coins. Open interest data indicated no major changes in positions, even amidst spot price volatility. Consequently, while options markets adjusted short-term expectations, sentiment in the derivatives market viewed the lackluster inauguration day as just one of many opportunities for future positive news in the industry.

Speculation that the incoming president would announce a strategic Bitcoin reserve in his inaugural speech led to a buildup of short-tenor options positions just before the event. This resulted in a significant increase in call buying and the strongest inversion of at-the-money term structure since the Nov 5, 2024 election. While the extreme pricing of front-end volatility has diminished, the strong skew toward OTM calls remains, reflecting a continued preference for upside exposure as Trump prepares to sign executive orders.

block-scholes-x-bybit-report.jpeg

Bybit X Block Scholes Crypto Derivatives Analytics Report (Jan 22, 2025): Sentiment Cools While Remaining Bullish Following Trump’s First Day

Figuring out how much to invest in crypto can be even more important than deciding which specific coins you want to purchase. Learn more here.

If you keep up with financial news, it can often feel like you’re hearing a story about a self-made crypto millionaire every other day. However, smart investors know that the reality is a little more nuanced. The crypto market comes with high rewards, but it also has high risks. To be successful, you need to be willing to 

 and make wise choices. This guide will explore one of the most basic things you’ll need to decide on before choosing to jump into the world of crypto — how much you should invest in crypto.

Figuring out how much to invest in crypto can be even more important than deciding which specific coins you want to purchase. Not only does the amount you invest in crypto impact your other finances, but it also determines which strategies you can afford to use.

The simple answer to how much you should invest in cryptocurrency is based on your net worth. Someone with millions of dollars can easily risk a lot more than, for instance, a college student without any savings. Traditional investment advice from financial expert Douglas Feldman 

 people shouldn't invest more than 1% to 5% of their total net worth in cryptocurrency. However, some crypto enthusiasts, such as

 be wise to invest up to 10% of your income in cryptocurrency.

Factors to Consider When Deciding How Much to Invest in Crypto

There's a lot of variation in guidelines for how much to invest in crypto. To find the right amount to invest for your specific situation, you'll need to stop and consider these essential factors.

One of the most important factors in determining how much to invest in crypto is the level of risk you’re willing to consider, or your risk appetite. If you have a high risk tolerance, you can invest more. Risk tolerance is partially a matter of personal preference. Some people are naturally cautious, while others are more comfortable making risky moves. However, it’s also wise to factor in your age. A high risk tolerance can work well when you're young because gradual market growth over the years will help balance losses. However, if you're older and closer to retirement age, a lower risk tolerance is advisable.

When planning to invest in crypto, it's a good idea to consider the best-case scenario as well as the worst. Ask yourself: What will happen if my crypto assets suddenly skyrocket in price and I make thousands of dollars overnight? If you're the type of person who would throw in more money or keep holding onto your crypto until the bubble bursts, it might be smart to reduce the portion of your money that you invest in crypto. The flashy profits associated with crypto can lead to overly emotional decisions that can cause problems for certain types of crypto investors.

, the types of coins you're holding make a big difference. Not all types of crypto have the same level of risk. If you intend to go for a risky investment portfolio with nothing but 

, you probably shouldn't take all your assets and invest them in crypto. However, if you intend to invest in a broad range of reliable coins, especially 

, allocating more of your assets toward crypto is a reasonable choice.

Things change fast in the crypto world, so the same advice doesn't always work in different situations. Any time you’re going to invest in crypto, you need to take a look at crypto market conditions. In a 

, prices are consistently high, so you may want to invest less. Meanwhile, in a 

, prices are low, and you can often get big returns by putting extra into crypto investing.

Your liquidity refers to the amount of easily accessible cash you have at hand. Crypto markets are fairly liquid, since you can remove your funds at any time. However, since crypto is a volatile asset class, trying to remove your funds during a bear market can lead to considerable losses. Before putting large sums into crypto investing, think about when you'll need liquid cash. For instance, if you're going to need a large lump sum for a house deposit or another big purchase soon, you need to invest less money in crypto.

Keep in mind that a lot of the recommendations to invest between 1% to 10% of your money in crypto are based on income. However, the reality is that different people have different budgets. Some may need almost all of their income for things like food and housing, so it's not smart to take all your money and invest in crypto. However, others who have more disposable income left over after managing other budgetary needs can invest in crypto more often.

The cryptocurrency market as a whole does follow certain trends, but crypto investments always fare better if you actually understand projects before you invest. It's a poor decision to put a large portion of your assets into obscure crypto you know nothing about. Informed investors only put significant investment into specific cryptocurrencies if they take the time to 

, understand its real-world utility, explore its pricing history and see how well it performs on crypto exchanges.

What Is a Good Allocation for a Well-Balanced Crypto Portfolio?

Once you figure out how much money you want to invest in crypto altogether, you need to consider how much money to put into each specific crypto. It's important to have a diversified portfolio, so a single coin running into issues won't tank your entire crypto investment portfolio. There are a lot of different ways to invest in crypto.

The simplest investment advice, as suggested by

, is simply to put 60% of your money into Bitcoin and 40% into Ethereum. That's a decent choice if you know nothing about crypto assets but still want to invest in crypto. However, if you're willing to research individual coins and pick your favorites, try this asset spread:

If you are open to some speculative exposure, consider allocating a small percentage (2 - 3%) to emerging sectors like 

Compared to some other investments, such as bonds, cryptocurrency is considered risky. The 2020 - 2024 chart below, detailing Bitcoin and S&P's weekly returns, reveals the relatively drastic peaks and troughs of Bitcoin in comparison to S&P 500. Notably, Bitcoin recorded a weekly drop of over 40% and nearly 30% rise in 2020, thugh its volatility has declined over the years. In contrast, S&P 500's gains and losses rarely exceeded 10% throughout the entire period.

Despite Bitcoin's drop in volatility, it is still considered relatively risky to invest in crypto because of the market’s significant price fluctuations and the proliferation of 

s. Additionally, there are countless examples of people who invest in crypto, jumping onto trends and losing their money when prices on the crypto exchange drop. One

 illustrates these dangers: he became interested in crypto during the pandemic and quickly got hooked upon seeing his portfolio values rise. He invested $50,000 into crypto, and eventually built an impressive portfolio worth $300,000. Following a 

, he had only $5,000 left in his account.

Furthermore, crypto markets are still not fully understood by the public, and are less regulated than traditional investments, so it's easier for malicious actors to take advantage of naive investors. For example, crypto-lending company 

 promised to store customers' assets, but when the company went 

, many users found that the company refused to return their invested funds. A similar issue arose when 

, and investors could no longer withdraw funds from their accounts.

Despite its risk, cryptocurrency fills an excellent niche in the financial world. When you invest in crypto, it can ensure your portfolio is diversified and insulate you from stock market crashes and other issues with traditional investments. Deciding to invest in crypto is also a valid option when you want to work with some higher-risk investments. Even beginning traders can find it useful to place a small portion of their investment funds into some reliable cryptos.

Furthermore, cryptocurrency allows people with tech expertise to make highly informed decisions. Finding your niche is always a useful investment strategy. Those who don't keep up with manufacturers and foreign currency exchange rates might find that they can specialize by choosing to invest in crypto. If you enjoy learning about the latest tech news and following online memes, crypto investments can be a great way to turn your knowledge into profits.

However, even though it often works well to invest in crypto, you still need to exercise some caution before working with crypto exchanges. If you want to invest in crypto, it's essential to follow the classic rule of, "Only invest the money you can afford to lose." Those who take out loans to buy 

 or throw their entire retirement account into crypto can end up losing it all if the markets take a turn for the worse. Like any other volatile asset class, crypto needs to be approached with some common sense.

Deciding how much money to invest in crypto is an essential part of your investment strategy. By considering things like risk tolerance and liquidity, you can create an investment portfolio that addresses your unique needs. When you have the right amount of money invested in crypto, you have the potential to make impressive profits without risking all your savings.

Beginner

how much to invest in crypto, how much to invest in bitcoin

how much to invest in crypto, how much to invest in bitcoin.png

How Much Should You Invest in Crypto? 7 Factors to Consider

Explore how to participate in the Bybit Copy Trading Gold&FX Fiesta to win rewards. In addition, learn how you can unlock an additional 5,000 USDT prize pool!

Trading in Gold and Forex has long been favored among seasoned investors seeking stability and long-term wealth preservation. However, these markets are traditionally complex, requiring deep knowledge of macroeconomic trends, currency correlations and geopolitical factors. But what if you could tap into these lucrative markets without the steep learning curve?

 — a game-changing solution that enables traders automatically mirror the strategies of experienced professionals. Bybit has now 

, allowing crypto traders to seamlessly diversify their portfolios without needing prior experience in these traditional asset classes.

To make this transition even more enticing, Bybit has launched the Copy Trading Gold&FX Fiesta, an exclusive event offering a 130,000 USDT prize pool to reward participants who trade in gold and forex using Bybit’s Copy Trading Gold&FX. Furthermore, there’s an additional 5,000 USDT prize pool you can unlock when you participate in the Copy Trading Gold&FX Read-to-Earn campaign. This comprehensive guide will help you understand the event, its mechanics and how you can actively participate to maximize your trading potential.

What Is the Bybit Copy Trading Gold&FX Fiesta?

 is a trading event in which participants can diversify their portfolios into gold and forex markets, copy expert traders and compete for 130,000 USDT in rewards.

With seamless integration of crypto-based trading using USDT, and the ability to follow professional traders, this event opens unique opportunities for beginners and experienced traders alike.

How Does Bybit Copy Trading Gold&FX Fiesta Work?

The event is structured to make trading in gold and forex markets accessible and rewarding. Participants can trade using USDT without needing to convert it into fiat currencies, making the process straightforward for crypto enthusiasts. By leveraging Bybit’s Copy Trading feature, users can replicate the strategies of successful Master Traders, gaining exposure to proven techniques.

There are two ways in which you can earn rewards from this event — as a Copy Trading Gold&FX Master Trader, or as a Copy Trading Gold&FX Follower.

To compete as a Copy Trading Gold&FX Master Trader, simply follow the two steps below:

If you’d like to compete as a Copy Trading Gold&FX Follower, simply follow these steps:

The event runs from Jan 24, 2025, 10AM UTC through Feb 24, 2025, 11:59 PM UTC, with rewards distributed on a first-come, first-served basis.

How to Participate in the Bybit Copy Trading Gold&FX Fiesta

Now that you have a better understanding of the campaign, let’s take a look at how you can participate in the Bybit Copy Trading Gold&FX Fiesta and grab a share of the 130,000 USDT prize pool! 

Before you can register for the event, you’ll first need to create a Bybit account. Follow our detailed 

 if you require assistance. If you’d like to participate as a Copy Trading Gold&FX Master Trader, you’ll first need to apply to become one by following this guide.

Participate as a Copy Trading Gold&FX Master Trader

: You will be prompted to log in to your Bybit account. If you don’t already have one, please register for a Bybit account. Once you’ve successfully registered for the event, you’ll see that the 

button is now gray and you’ll be able to see the required tasks in order to win a share of the rewards.

task and complete your first Master Trade.

: Trade at least two lots of gold or forex daily for the duration of the campaign to gain one Lucky Draw chance per day.

Once you’ve accumulated Lucky Draw chances, you can use them to spin the Lucky Draw wheel on the Copy Trading Gold&FX Fiesta page. Simply click the 

button. You can view your available rewards by clicking 

Participate as a Copy Trading Gold&FX Follower

task and a pop-up window will appear. Click 

On the Bybit Copy Trading Gold&FX page, scroll down to view the 

. You can filter all the Master Traders by 

. Look for a Master Trader whom you resonate with, and click on the corresponding 

: Input the amount you’d like to trade, and select the items to copy. Then, check the box once you’ve read the 

[BONUS] Copy Trading Gold&FX Read-to-Earn Campaign

Looking to boost your rewards? Unlock an additional 5,000 USDT prize pool when you participate in the 

Running from Jan 24, 2025, 10AM UTC through Feb 24, 2025, 11:59PM UTC, the Copy Trading Gold&FX Read-to-Earn campaign features five modules and a quiz at the end of the course. Read all five modules and complete the quiz to win a share of the 5,000 USDT prize pool!

Should You Participate in the Bybit Copy Trading Gold&FX Fiesta?

This event is a golden opportunity (pun intended) for traders who want to explore gold and forex markets with minimal effort while enjoying a range of benefits. Here are some compelling reasons to consider joining:

While crypto trading can be highly rewarding, the crypto market is 

. Gold and forex markets offer a level of stability that crypto lacks, making them a great way to hedge risk and create a more balanced portfolio.

One major challenge in gold and forex trading is the complexity of fiat conversions. Bybit simplifies this by allowing users to trade these assets with USDT, eliminating the need for bank transfers or currency conversions.

3. Copy Expert Traders — Instead of Learning from Scratch

Traditional gold and forex trading requires an in-depth understanding of macroeconomic trends, monetary policies and market fluctuations. However, Copy Trading removes this complexity by allowing users to follow and replicate the strategies of successful Master Traders. This is perfect for beginning traders who want to start without spending years mastering market analysis.

With 130,000 USDT in rewards and an additional 5,000 USDT prize pool up for grabs, you can earn daily rewards simply by executing trades. Completing daily trading tasks not only improves your trading experience, but also gives you the chance to win Lucky Draw bonus rewards.

This campaign is designed to be accessible to everyone, whether you’re an experienced trader or completely new to gold and forex. With Copy Trading, all you need to do is select the best Master Trader for you — and let the system handle the rest.

The Bybit Copy Trading Gold&FX Fiesta is more than just a trading event: it’s an opportunity to broaden your horizons, learn from experts and earn rewards. With simple steps to join and a host of benefits, this event is designed to empower traders at every level.

Don’t miss out on your chance to diversify into gold and forex markets and compete for your share of the 130,000 USDT prize pool. Moreover, you can unlock an additional 5,000 USDT prize pool simply by reading five modules and completing a quiz via the Copy Trading Gold&FX Read-to-Earn campaign! 

 — and take the first step toward unlocking new trading opportunities today!

copy trading gold & fx fiesta.png

How to Participate in Bybit Copy Trading Gold&FX Fiesta

Crypto

Bitcoin

Explainers

Bitcoin is a decentralized digital currency that utilizes blockchain technology to enable secure and transparent transactions.

In a world permeated by digital technology and global connectivity, Bitcoin has emerged as a trailblazer, challenging conventional financial systems and captivating audiences worldwide. But what is Bitcoin exactly, and how does it work? In this comprehensive guide, we will delve into the fascinating world of cryptocurrency, exploring the fundamentals, history, usage, and challenges of Bitcoin, as well as its legal aspects and future outlook.

Bitcoin is a decentralized digital currency that utilizes blockchain technology for secure, transparent transactions. It's designed to be a peer-to-peer payment system without a central authority, allowing direct transactions between users. Key features include decentralization, a cap of 21 million coins, and legal variations across jurisdictions. Bitcoin combats traditional financial systems, offering financial inclusion globally. Its divisibility and adaptability make it a versatile digital currency. Mining, integral to Bitcoin, rewards miners with new coins, governed by a halving mechanism to control supply. Bitcoin's future involves addressing scalability and environmental concerns.

Decentralization and peer-to-peer network

The decentralized nature of Bitcoin distinguishes it from conventional financial systems that depend on central authorities for transaction management and money supply control. By utilizing a distributed ledger called the 

, Bitcoin transactions are verified by a network of nodes, ensuring security and transparency without the need for intermediaries. This 

Not only does Bitcoin’s peer-to-peer nature benefit those seeking to transact without intermediaries, but it also promotes an inclusive financial ecosystem. Unlike centralized systems that can exclude unbanked populations or those with limited access to financial services, Bitcoin’s decentralized network allows anyone with an internet connection to participate, creating new opportunities for economic growth and financial inclusion.

Bitcoin, as a digital currency, presents several advantages in terms of divisibility and adaptability over traditional or fiat currencies. One such advantage is that Bitcoin is highly divisible, with the smallest unit being a satoshi, named after its mysterious creator, 

. This level of divisibility allows for more precise transactions and greater flexibility when using Bitcoin as a medium of exchange, regardless of price fluctuations.

This high level of divisibility is not only beneficial for individual transactions but also contributes to Bitcoin’s adaptability as its value changes over time. By being divisible up to eight decimal places, Bitcoin can accommodate a wide range of use cases and ensures that users can transact in smaller amounts without dealing with unwieldy decimal values. Consequently, Bitcoin’s divisibility renders it more versatile than most traditional currencies, enabling more accurate transactions and increased flexibility in value transfer.

Embracing digital currencies like Bitcoin also opens up new possibilities for financial innovation and growth. As digital money, Bitcoin transcends physical boundaries, allowing for:

This makes it an attractive option for individuals and businesses looking to capitalize on the growing digital economy.

The utilization of blockchain technology for securing and making transactions immutable is a key innovation of Bitcoin. The Bitcoin blockchain, also known as the bitcoin 

, is a distributed ledger that stores transaction data in a secure and transparent manner, with cryptographic hashing and consensus mechanisms ensuring that transactions are valid and tamper-proof. This level of security is crucial for a payment system that operates without the need for trust between parties.

While no system is completely impervious to attack, the decentralized nature of the Bitcoin blockchain makes it exceptionally resilient. Disrupting the Bitcoin network would require an attacker to control more than 50% of the network’s computational power, a feat that is practically impossible given the current size and distribution of the network. As a result, Bitcoin users can have confidence in the security and integrity of their transactions, knowing that their digital assets are well-protected.

The path of Bitcoin was initiated by an enigmatic figure or group, Satoshi Nakamoto, who published a whitepaper in 2008 that outlined the design and intent of the digital currency. The first block of the Bitcoin blockchain, known as the genesis block, was mined in 2009, marking the beginning of the cryptocurrency’s development.

Since then, Bitcoin has grown into a global phenomenon, attracting attention from investors, technologists, and regulators alike.

Satoshi Nakamoto, the pseudonymous creator of Bitcoin, introduced the world to a revolutionary concept: a digital cash system that eliminates the need for trusted intermediaries. In the 

, Nakamoto outlined the key principles behind the cryptocurrency, such as:

By implementing cryptographic techniques and a peer-to-peer network, Nakamoto proposed a system that could function without the need for banks or other third parties, enabling users to transact directly with one another.

Despite various attempts to uncover the true identity of Satoshi Nakamoto, the individual or group behind the pseudonym remains unknown. This air of mystery surrounding Bitcoin’s origins has only added to its allure, with many speculating about the motives and intentions of its enigmatic creator.

The genesis block, the first block ever mined in the Bitcoin blockchain, holds immense significance in the world of cryptocurrency. Mined by Satoshi Nakamoto in 2009, the genesis block serves as the foundation for the entire Bitcoin ecosystem and is the prototype for all other blocks in the blockchain. The mining of the genesis block marked the beginning of Bitcoin’s development, setting the stage for a new era of financial innovation.

From its humble beginnings, Bitcoin has experienced numerous milestones and challenges along the way. Some key events in its early development include:

Despite these challenges and the ever-changing landscape of the digital currency market, Bitcoin has continued to evolve and grow, solidifying its status as a trailblazer in the world of finance.

The mining process, which involves solving complicated mathematical problems to validate transactions and create new coins, is central to Bitcoin’s functionality. Through this system, miners are rewarded with newly 

 and transaction fees, incentivizing them to contribute their computational power to the network.

One unique aspect of Bitcoin’s design is its capped supply, with a maximum of 21 million coins ever to be created.

 system is a critical component of Bitcoin’s mining process, requiring miners to expend significant computational power to solve intricate mathematical puzzles and validate transactions. This mechanism ensures that only those who have demonstrated their commitment to the network by devoting resources to the mining process are rewarded with newly created coins and transaction fees.

Miners prioritize transactions with the highest fees attached, as these fees help to cover their electricity and maintenance costs. As more miners join the network and demand for block space increases, competition for higher fees can lead to slower confirmation times and increased transaction costs, highlighting the need for scalable solutions like the Lightning Network.

In addition to the creation of new coins, miners also play a crucial role in maintaining the security and integrity of the Bitcoin network. By verifying and adding new transactions to the blockchain, miners help to ensure that the network remains resistant to tampering and fraud.

One key aspect of Bitcoin’s design is its controlled supply, with a total cap of 21 million coins ever to be created. This scarcity is maintained through a process called 

, which occurs approximately every four years or every 210,000 blocks, reducing the mining rewards by 50%. At the time of writing, three halving events have taken place, with the next one anticipated to occur in 2024.

This controlled supply and halving mechanism serve to create a deflationary environment for Bitcoin, as the rate of new coin creation decreases over time. As a result, Bitcoin is often compared to digital gold, with many investors viewing it as a store of value and a hedge against traditional financial assets.

Having grasped Bitcoin’s fundamentals, history, and mining process, one might question how to obtain and securely keep this digital asset. The process is relatively straightforward, involving the use of cryptocurrency exchanges to buy Bitcoin and digital wallets to store and manage one’s holdings.

Cryptocurrency exchanges, also known as bitcoin exchanges, serve as the primary gateway for individuals looking to buy, sell, or trade Bitcoin. These platforms allow users to exchange their fiat currencies, such as US dollars or euros, for Bitcoin, or even trade one cryptocurrency for another.

To purchase Bitcoin on an exchange like Bybit, users simply need to follow these steps:

Buying one Bitcoin is as easy as using the right bitcoin software to sell Bitcoin!

Of course, the security of one’s funds is paramount when using a cryptocurrency exchange. Reputable exchanges like Bybit implement a variety of security measures, such as:

Once Bitcoin has been acquired, the next step is to securely store and manage one’s holdings. This is where Bitcoin wallets come into play. A Bitcoin wallet is a software program or specialized device that stores the private keys needed to access and manage one’s Bitcoin holdings, ensuring secure storage and transaction capabilities.

There are various types of Bitcoin wallets available, such as paper wallets, hardware wallets, and software wallets, each offering different levels of security and functionality. For example, hardware wallets provide an elevated level of security by generating and storing private keys in an offline, secure environment, thereby protecting them from potential hackers and keylogging attacks.

When managing private keys in a Bitcoin wallet, it is essential to take certain security precautions, such as maintaining the confidentiality of one’s keys, utilizing cold storage techniques, and implementing strong encryption. By taking these measures, Bitcoin holders can ensure that their digital assets are well-protected against theft or loss.

Using Bitcoin for Payments and Investments

Beyond its potential as a store of value or speculative investment, Bitcoin can also be used for a variety of practical applications, such as:

In this section, we will explore some of the ways Bitcoin can be utilized in everyday life and the financial markets.

One of the primary use cases for Bitcoin is as a means of payment for goods and services. An increasing number of global merchants, retailers, and service providers are starting to accept Bitcoin as a payment method, often displaying a “Bitcoin Accepted Here” sign at their physical locations and on their online checkout pages.

To make a payment with Bitcoin, users simply need to provide their public address or scan a QR code, and the transaction is processed through the Bitcoin network, which records bitcoin transactions, in a matter of minutes. This enables fast, secure, and cost-effective bitcoin payments, particularly for international payments or remittances, which can be subject to high fees and lengthy processing times through traditional banking systems.

However, using Bitcoin for payments is not without its challenges. Price volatility can pose risks for both buyers and sellers, and the energy-intensive mining process has raised environmental concerns.

Despite these drawbacks, the potential benefits of Bitcoin as a payment method continue to drive its adoption and integration into the global economy.

As an investment, Bitcoin has experienced significant price volatility since its inception, attracting the attention of both long-term investors and short-term speculators. Factors such as market forces, emotional reactions, and global financial events can all impact bitcoin prices, making it a potentially lucrative but also risky investment.

In addition to trading or holding Bitcoin as a store of value, some investors are also exploring the world of cryptocurrency derivatives, such as futures contracts and options. These financial instruments can provide additional opportunities for speculation and risk management, particularly for those looking to hedge their exposure to the volatile cryptocurrency markets.

Ultimately, the decision to invest in Bitcoin will depend on an individual’s financial profile, investment portfolio, risk tolerance, and investment goals. As with any investment, it is important to conduct thorough research, consider the potential risks and rewards, and seek advice from a financial professional before diving into the world of cryptocurrency investing.

As Bitcoin and other cryptocurrencies continue to grow in popularity and usage, governments and regulators around the world are grappling with the challenges of effectively regulating this new asset class. In this section, we will explore the legal aspects of Bitcoin, including its status as an asset or currency, taxation, and efforts to combat money laundering and other illegal activities.

Bitcoin’s legal status is country-specific; while some jurisdictions acknowledge it as a legal currency, others categorize it as an asset or property for taxation purposes. In the United States, for example, Bitcoin is considered an asset rather than a currency, as it is not recognized as the official coin and paper money of the country. In contrast, some countries like Japan have recognized Bitcoin as a legal form of payment, subject to certain regulations and tax requirements.

Taxation of Bitcoin also varies depending on the jurisdiction, with different countries implementing their own tax laws and regulations concerning cryptocurrency transactions and holdings. Some countries, such as Georgia, Malta, Switzerland, and Germany, have adopted crypto-friendly tax policies, while others, like France, Austria, and Italy, do not impose taxes on crypto-to-crypto transactions. As tax laws and regulations surrounding Bitcoin continue to evolve, it is crucial for individuals and businesses to stay informed and consult with tax experts or official government sources for the most up-to-date information.

The legal landscape for Bitcoin is complex and ever-changing, with governments and regulatory bodies around the world working to strike a balance between fostering innovation and protecting consumers, investors, and the integrity of the financial system. As the cryptocurrency market continues to grow and mature, it is likely that further legal and regulatory developments will emerge in the coming years.

Anti-money laundering and combating illegal activities

As with any financial system, the potential for abuse and criminal activity exists within the world of Bitcoin and cryptocurrency. In response to these concerns, regulatory efforts have been directed toward combating money laundering, terrorist financing, and other illegal activities involving cryptocurrencies.

One approach taken by regulators is to impose sanctions on cryptocurrency exchanges and individual wallets associated with criminal activities. By identifying and targeting the financial infrastructure used by criminals, authorities can disrupt and deter illegal activities while also ensuring that legitimate users can continue to benefit from the advantages of digital currencies.

In addition to targeted sanctions, governments and international organizations are also working to develop and implement comprehensive anti-money laundering (AML) and counter-terrorist financing (CTF) regulations for the cryptocurrency sector. These efforts aim to strike a balance between promoting innovation and growth in the digital currency space while also protecting the financial system and society from the risks associated with illicit activities.

Despite Bitcoin’s numerous benefits and potential uses, it also confronts several challenges and uncertainties that may influence its future progression. In this section, we will discuss some of the key issues confronting Bitcoin today, as well as potential solutions and future prospects for the cryptocurrency.

One of the primary challenges facing Bitcoin is its scalability, or the ability to efficiently process a large number of transactions on the network. As more users join the network and demand for block space increases, transaction processing times and fees can rise, leading to congestion and inefficiencies. Several potential solutions have been proposed to address these scalability issues, such as the Lightning Network and increasing the block size limit.

The Lightning Network, for example, is a layer 2 scaling solution that enables faster and more affordable transactions by facilitating off-chain transactions between users. By reducing the need for on-chain transactions and fees, the Lightning Network can help to alleviate congestion on the Bitcoin network and improve its overall scalability.

Other proposed solutions to Bitcoin’s scalability challenges include increasing the block size limit, which would enable more transactions to be processed within each block, and the development of alternative consensus mechanisms, such as proof-of-stake, which could provide more efficient and environmentally friendly methods of validating transactions.

Environmental concerns and energy-efficient alternatives

The energy-intensive nature of Bitcoin mining has raised environmental concerns, as the process consumes significant amounts of electricity, primarily from fossil fuel sources. This has led to calls for the development of more energy-efficient alternatives to mining Bitcoin, which could help to reduce its carbon footprint and mitigate the environmental impact.

One potential alternative to the proof-of-work system is the proof-of-stake consensus mechanism, which requires validators to hold and “stake” a certain amount of cryptocurrency in order to participate in the validation process. This approach eliminates the need for energy-intensive mining and can significantly reduce the environmental impact of cryptocurrency networks.

In addition to exploring alternative consensus mechanisms, some cryptocurrency projects are also investigating the use of renewable energy sources, such as solar or geothermal power, to power their mining operations. By embracing more sustainable and energy-efficient practices, the cryptocurrency industry can continue to innovate and grow while minimizing its environmental impact.

Bitcoin represents a groundbreaking innovation in the world of finance, offering a decentralized and secure alternative to traditional financial systems. By harnessing the power of blockchain technology and peer-to-peer networks, Bitcoin has the potential to revolutionize the way we conduct transactions and manage our financial assets. However, as with any emerging technology, challenges such as scalability and environmental impact must be addressed in order to ensure its long-term success and sustainability. As we look to the future, it is clear that Bitcoin and the broader cryptocurrency ecosystem will continue to evolve and shape the financial landscape in ways we can only begin to imagine.

What exactly is Bitcoin and how does it work?

Bitcoin is a digital currency that allows people to send money over the internet without relying on a central authority. It relies on blockchain technology to facilitate peer-to-peer transactions on a decentralized network, making it an ideal choice for those who wish to bypass traditional financial institutions.

At the time of writing, 1 Bitcoin is valued at $34,939.65 USD (6th Nov 2023).

Bitcoin can be used to make purchases from merchants, or you can invest in stocks, blockchain startups, or other platforms to earn interest. Trading Bitcoin can also generate profits if the market price increases, and accepting Bitcoin as payment and affiliate marketing can be lucrative too.

Bitcoin was created as a decentralized payment system, enabling users to securely and directly transact with each other without the involvement of any third-party authority.

What Is Bitcoin (The Definitive Guide)

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards