investing in bitcoin

The price of bitcoin has been rising steadily over the years, and as it becomes more mainstream, more and more people are eager to invest in the technology.  Long term investors in bitcoin have really benefited from the price increases, and going forward, the future looks very bright.

Please also take a look at our more recent post on investing in bitcoin here: Easy Bitcoin investment in South Africa

(If you want to buy bitcoin, please read our page on where to buy bitcoin in South Africa)

luno bitcoin South Africa

Nobody knows what the price will be in the next hour, let alone the next year, so it is a high risk investment. What we do know is the past performance of bitcoin, as shown in the table below.

bitcoin investment performance

Current historical prices of bitcoin as of 22/04/2017

Investors are drawn to bitcoin, when they see that in the past it has been possible to make very good returns. Investing a year ago today (22/04/2017) would have given you a 177% increase in value of your bitcoin investment. Even an investment 1 month ago, would have got you a 23% increase in value.

Tread carefully when investing in bitcoin, as past performance of bitcoin is not a prediction of future results either! Once again, nobody knows what the price will be in the future.

For investors, bitcoin is the new gold

Bitcoin is sometimes referred to as ‘digital gold’, or ‘gold 2.0’, and a lot of similarities to gold. People buy gold as an investment for the future, and similarly investors also buy bitcoin, in the belief that it will appreciate in value in the future.

For centuries gold has been seen as valuable all around the world and now that bitcoin is around, it too is starting to be seen as a store of value due to its usefulness and scarcity. Like gold, to invest in bitcoin, usually means to buy bitcoin and store it safely and securely, in order to sell it at a future date for a profit. Some people might keep Kruger Rands in a safe as an investment, while other keep bitcoin wallets.

The simplest way that the average person can invest in Bitcoin is to buy some on a bitcoin exchange.

Bitcoin is divisible like gold is, which means that if you want to buy some gold, you don’t need to buy an entire gold bar, you can buy some gold to the value of how much you would like to spend. Bitcoin works the same way…you do not need to buy a whole entire bitcoin, you can buy bitcoin to the value of the amount you would like to spend. If you want to buy bitcoin to the value of R100, R1000, or even R1 million, you can do that.

At today’s current price of bitcoin of R17253 for one bitcoin, a purchase of bitcoin to the value of R2500 for example, will get you around 0.1449 BTC.

What is the minimum investment amount?

There is no real minimum amount when it comes to bitcoin, but to see any real return on your investment, you should invest enough to make it worth your while. Since the price of bitcoin is volatile, it is not recommended to invest money that you will need desperately in the foreseeable future. Most people agree that to see the best benefits, a bitcoin investment should be considered a long term investment.

People often see the price of bitcoin and worry that it is too expensive to invest in, but the reality is you don’t need to buy a whole bitcoin, you can buy bitcoin to the value of the amount you can afford to spend.

Buying bitcoin over time

The bitcoin price volatility has been steadily decreasing over the last few years, but even so, a single large investment into bitcoin is not always the best choice, often it can be wiser to invest a smaller amount at regular intervals.

Investors in bitcoin often use a technique known as ‘Dollar-Cost Averaging’ (DCA) to protect themselves against fluctuations and downside risk. They do this by buying fixed amounts of bitcoin on a regular schedule, regardless of what the price is on the day. So as an example, you might buy R5000 worth of bitcoin, regardless of price of bitcoin, on the first day of every month. This would mean that you would purchase more bitcoin when the price goes lower and less bitcoin when the price goes high, but always the same fixed currency amount that you have decided on.

How much money will you make?

Nobody can predict the future, and since bitcoin trades like a commodity, it is possible for you to make a great profit, or a huge loss, depending on when you buy and sell your bitcoin.

There is no spreadsheet or table of earnings with bitcoin, or any monthly income from investing in bitcoin. Beware of any website that offers you guaranteed profits, tables with profits or a monthly income from investing!

Just like if you buy some gold for an investment, there is no monthly income from that, or table predicting your profit. The market prices change based on supply and demand, and your profit will depend on when and at what price you buy and sell your bitcoin.

Beware any bitcoin system or website offering guaranteed returns, it is more than likely a scam or ponzi scheme, stay away!

What is a bitcoin exchange?

A bitcoin exchange is a website that facilitates the process of exchanging your Rand for bitcoin with other users. If you want to invest in bitcoin, the best place to do that is at a bitcoin exchange.

Please read our page on where to buy bitcoin in South Africa

On a bitcoin exchange you are not actually buying the bitcoin from the exchange itself, you are instead trading with other users such as yourself, who are putting their bitcoin up for sale. The exchange acts as a middleman, ensuring that sellers get their Rand, and buyers get their bitcoin. You cannot get scammed by another bitcoin trader on a bitcoin exchange, you do not know who you are trading with, and have zero communication with the other traders. Traders use bitcoin exchanges to trade bitcoin like Forex 24/7, but for investment purposes, you would just use the exchange to buy your bitcoin when investing, or sell your bitcoin when divesting.

Please also take a look at our more recent post on investing in bitcoin here: Easy Bitcoin investment in South Africa

How to safely store your bitcoin investment

Once you have bought your bitcoin on a bitcoin exchange, it is wise to withdraw it from the exchange and store it securely offline. If you are purchasing bitcoin regularly to put towards your investment portfolio, you can withdraw each time that you make a purchase to your secure wallet. We highly recommend that you invest in a secure bitcoin hardware wallet to store your bitcoin offline.

We offer secure bitcoin hardware wallets for sale in the form of the Trezor and Ledger wallet.

To find places where you can buy bitcoin in South Africa, you can see a list here:

To see a list of bitcoin wallets you can use to store your bitcoin, you can read this page:

15 Responses to How to invest in bitcoin in South Africa
  1. Please stay away from the ponzi scams like mygalaxylifestyle and gladiacoin are two off the top of my head. There is no need for an mlm or recruitment type scheme to get involved in bitcoin and make a solid return. You’re actually putting your hard earned money at great risk of loss.

  2. The first thing you need to do is choose a place to buy bitcoins from. See some places in South Africa here: The bitcoin exchanges such as ice3x and luno are normally the fastest, safest, and cheapest places to buy. They will allow you to open an account, deposit Rand by EFT to fund your account, and thereafter exchange the Rand you have deposited for bitcoin.

  3. Please stay away from false cryptocurrency like TBC – The Billion Coin.
    Bitcoin is legit so follow BitcoinZAR’s method of investing.
    For those who are scared of losing money can also try 1 BTC = $9234 perfect method of earning free Bitcoin. BitcoinZAR all the way..

  4. Yes of course. Trading between exchanges is arbitrage trading, where the difference in price after subtracting trading fees, is your ‘profit’. You can read an old article on doing this between ice and luno here:

  5. This is entirely your decision, personally I believe the long term approach is better, so I am leaving mine secured in cold storage for a few years. I buy regularly like a savings plan and just send it to my wallet for a future date. From what i can see the price is extremely volatile in an upward trajectory, so I dont worry myself about the short term fluctuations.

  6. Then trading is not for you. Rather just buy and hold for the long term then.

  7. You can do nothing, just leave it for the long term and hopefully the price will go up.

  8. To deposit Rand is free by EFT. If you deposit cash you pay extra (ZAR 20.00 + 5.00% ). If you use the exchange you will pay a maximum of 1% fee for taking a trade, 0% fee if you make the trade. If you use the instant buy/sell option, you will pay no fee, but a premium price instead. To deposit bitcoin they charge 0.0002 BTC fee, and to withdraw bitcoin they charge the standard network fee which is dynamic and changes all the time. To withdraw Rand to your bank they charge R8.50 per withdrawal.

  9. If you deposit R500 and use the exchange you can work out approximately how much bitcoin you will get by dividing the amount of Rand you deposit, by the current price. So R500 / R195055 = 0.00256 BTC approximately.

  10. Almost certain that is a pyramid scheme….think about it

  11. What is this Bitcoin Global that pays out 14% per week on capital? I dont know How this work I bought bitcoin on altcointader at the moment but I want to try Luno also

  12. Use ice cubed or luno platform to trade Rand and bitcoin. There is no real minimum, but about R500 is a good start. There is no software to buy, its similar to forex trading.


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