Bitcoin vs Mutual Fund Investment: Which One Is Better?

Bitcoin and mutual funds are two different types of investment options. The former one is a variant of cryptocurrency while the latter one is an open-end investment fund. Cryptocurrencies are a form of digital assets that are provided in coin ownership to individuals through a computerized system that is secured by cryptography. It is neither available in physical form nor issued by any centralized authority. This service is not provided by any bank or financial institution and its transactions are completely exchanged over the internet.

Mutual funds are investment plans which are offered by banks as well as independent financial institutions. The popularity and credibility of these funds have increased significantly over the past few years. There are a lot of plans and schemes available for one to choose from. For getting detailed information about what is a mutual fund, click here to know more.

Introduction To Bitcoins And Mutual Funds

Bitcoin is the first-ever invented cryptocurrency which was developed by Satoshi Nakamoto in 2009. It works seamlessly through blockchain technology in uninterrupted network facilities. This digital asset can be stored online which is termed as “hot storage” and offline too, which is termed as “cold storage”. It is used as virtual money for buying assets online and there is no restriction on its value depending upon the range of its network. Although the volatility of bitcoins is extremely high, it has become a very highly traded asset.

What is a mutual fund? Well, mutual funds are created by pooling money from various investors to purchase bonds, shares, stocks, and debentures of different companies in order to earn profits. The investment options start from as low as INR 500. There are two types of investment options – SIPs (Systematic Investment Plans) and lumpsum investments. The popularity of mutual funds is at its peak in India given it comes with a bunch of benefits for the investors to reap.

How To Invest?

The process of investment in bitcoins and mutual funds are poles apart. People are well aware of what is mutual fund but not every person knows about bitcoins. This is because bitcoins do not fall under the investment category of any legally authorized financial institution whereas mutual funds are offered by many banks and non-banking financial institutions as well.

Investment In Bitcoins

Just like mutual funds, there are two ways to invest in bitcoins.

Investment for financing short-term goals – Investors who are planning to gain profits in the short-term should choose the lumpsum option and buy bitcoins in bulk and sell them as soon as the market conditions are favorable. However, this must only be used by individuals who have a high-risk appetite. This is because if one faces loss, it would be as huge as the profits were expected. Besides, the need to monitor the market conditions constantly is also a big problem.

Investment with long-term goals – For those who are comfortable withholding money in these digital coins for a long time, the SIP option is better. The problem here is that this option is very new which is why it has not yet been developed in every country.

How To Invest in Bitcoins Online?

Investment in Bitcoins is very simple today, thanks to the popularization of the internet. You have to follow a few simple steps to invest in Bitcoins online:

  • The first step is to choose a Bitcoin wallet.
  • Link the Bitcoin wallet to your bank account.
  • Select a Bitcoin exchange. There are different Bitcoin exchanges available and you can select the one that fulfills your needs.
  • Start investing hassle-free!

Investment In Mutual Funds

Well, the time has gone when people were conflicted about what is a mutual fund. It is popularly known now that mutual funds can be very profitable and enthralling for the investors who analyze the market thoroughly and make wise choices. The lumpsum and SIP schemes are both equally popular and well-developed and come with a host of benefits. The best part is that it does not require much of an effort from the investors because the funds are mostly managed by professional and experienced managers who are liable for making the investments. There are popular three types of funds options:

  • Equity funds – As per the declaration made by SEBI, there are around 11 types of equity funds. Out of all these, the most popular one is the ELSS (Equity Linked Savings Scheme) fund which is also entitled to tax deductions.
  • Debt funds – There are 16 types of debt funds that offer good returns at comparatively lower risk quotient. The mutual funds which make investments in debt and other money market securities are classified in this category.
  • Hybrid funds – These funds are a balanced combination of both equity and debt and come with 7 types of options.

How To Invest in Mutual Funds Online?

Just like investing in Bitcoins, investing in mutual funds is also very easy these days. Gone are the days when mutual funds investment was a difficult task. With the availability of different online investment platforms, you just have to follow a few quick steps:

  • Browse online to get information of different investment platforms. Select the one which suits your need the best.
  • Get information on the different funds available on the platform. Now, do your own research on the performance of these funds.
  • Once you get a fair idea about how certain funds are performing in the market, you can choose those and start investing in them.

The bottom line is that bitcoins are not at all legal in India. This is the biggest risk factor because of the chances of online fraud doubles-up in this case. On the other hand, mutual funds involve risks, which is inevitable in any form of investment, they are much safer because the funds are provided by registered financial institutes. Thus, if an investor has to make a choice between the two, the answer would always be mutual funds.

TechSmashers
Tech Smashers is a global platform thatprovides the latest reviews & newsupdates on Technology, Business Ideas, Gadgets, Digital Marketing, Mobiles,Updates On Social Media and manymore up coming Trends.

RECENT POSTS

Want To Attract More Buyers? Here Are 10 Things That Will Boost Your Revenue

Has your business hit a rough patch? Are you struggling to ramp up your sales and get out of a revenue slump? Well, you...

Best Places To Display Your Vinyl Banner And The Best Accessories To Use

You've finally ordered your custom vinyl banner – great. The next step is choosing where to hang it for display and accessories, ensuring it's...

Best Car Cell Phone Repair Software

Technology is not always infallible, and that includes your smartphones and tablets. We all love the way our smartphones have made our lives easier,...

How To Start Your Heavy Industrial Business The Right Way

The industrial world is rife with business potential, but that doesn't mean that everyone can break in and be a success. As with any...

The Future Of Automated Trading (AI)

Automated trading apps allow users to establish the parameters that determine both entry and exit points in the financial markets, as well as making...

Can We Trust Artificial Intelligence?

Relying on machines and decision support systems can pose big ethical problems. And the programs may have a "cold" logic, they are not free...

3 Home Mover Friendly Software To Save Time, Money & Burden

Summer becomes the peak season for moving companies to be in high demand and dynamic for movers and travellers alike. Besides, moving can be...

How To Avoid Abandonment Of Your Mobile App

The rate of abandonment of mobile applications continues to increase with the development of technology. Technology is having a significant impact on smartphones every...