Bitcoin for Beginners [Part 3] Exchange, Trade, Lend

Warren Buffett said it best. Price is what you pay, value is what you get. The value of Bitcoin is what we're talking about today. What's in it for you? What's in it for me? What can Bitcoin do for us? I'm super excited to be covering this topic 'cause it talks about all the things that I love with finance. 
 
We're going to be going through simple trasactions. We're going to be diving deeper into investing and trading in Bitcoin. And we're also going to even be covering lending Bitcoin, so if you're excited as I am, grab your favorite beverage, sit back, relax, and let's dive into it. 
 
Welcome back to the channel. I'm Brian Logan and I am so thankful that you were here. As I said, I'm super excited to be talking about this topic and I think it's going to be great for you to understand how Bitcoin can add value to your life and your family's’ life and how you can make the most of it before we get into a few things to cover. 
 
One, there's some links down below of some companies and things that I'm going to talk through today that I personally use and believe in. So if you're ready to get started, feel free to check those out. 

🤑 Free $10 in Bitcoin [ Coinbase Sign-up ] https://bit.ly/3wusPIB 

💰 Up to 8.5% APY + Up to $250 of BTC [ BlockFi ]: https://blockfi.com/?ref=4df2937e

Next a quick disclaimer. I'm not a financial professional or an economist or anything like that, so be sure to do your own research before investing or getting involved with Bitcoin stocks. Anything that we talk about today is my own opinion and experiences, so just be sure that you're aware of the risks before you make any financial decisions. 

Let's jump into how Bitcoin has value.

So the 1st way that Bitcoin has value might seem a little obvious - it's the ability to have a currency that allows you to exchange it for goods and services globally and throughout the world in a very fast manner. It's also very secure and not only can you exchange it for goods and services, and in a really secure manner, but you also don't need any banks. 

You are in full control of your money and what you do with it. This control actually adds way more value then you think. In fact, we're going to get into this a little bit more when we get to lending, but believe it or not, when you deposit money into your bank account, the bank only holds 10% of that in cash. The other 90% they're loaning out and making money on, and they pass just a small fraction back to you.

 

It's all about control, and Bitcoin allows you to control your money, and it's for all these great reasons that some exciting news came out recently that El Salvador, the entire country has adopted Bitcoin as a currency for all of its citizens to use, and this is really big news, because if you go back to the last video, we learned that demand for Bitcoin drives a lot of its price, so the more and more people that use it, the higher and higher the price of Bitcoin will go. 

So that's the 1st way that bitcoin adds value. It allows us to exchange Bitcoin for goods and services around the globe in a secure and quick manner without the need for these third party banks to be involved. 

So the next way that Bitcoin adds value for us is the way I'm most excited to talk about. And that's trading and investing in Bitcoin and taking advantage of price appreciation.  

So before we get into trading specifically Bitcoin, I wanted to call out for those of you who weren't aware that currency training is not a new idea. In fact, there's these forex markets as they're called or foreign exchange markets where currencies are traded between businesses all throughout the globe and people all throughout the globe, every day. In fact, this market is so big, about $6.6 trillion are traded hands every single day. So when you trade or invest in Bitcoin, it's synonymous to Forex trading. We're exchanging currency for Bitcoin. 

The main difference is that these traditional currencies are based on government and government regulation, where Bitcoin is based more off of users and the cost to produce Bitcoin. I cover a lot more about that - the price of Bitcoin - in my previous video, so I'll put a link above if you haven't checked that out already. Trading or investing in Bitcoin is as simple as exchanging your currency for Bitcoin. 

Before going onto the 3rd way we give value out of Bitcoin. Let's spend a little bit more time here talking about how you can trade and get this Bitcoin or get this value out of Bitcoin from investing or trading. 

The 1st way you can trade or invest in Bitcoin is based on what I was just describing, where you trade one currency for Bitcoin and the way to do that is on an exchange. So I use Coinbase Pro, which is one of the largest and most trusted exchanges, and I've actually put a link below. You can get a free $10 worth of Bitcoin if you sign up through that link. It's a phenomenal platform that offers really low fees, and I've actually done an entire video series on how to get set up how to trade, how to do everything you need to know how to do in Coinbase Pro, so go check those out here.

The 2nd way to trade or invest in Bitcoin is through what I unofficially call restricted exchanges. 

This is actually your Robinhood app, or Webull or things like that. And the reason I call it restricted and why I don't trade on those platforms with cryptocurrency is you can't do anything with that cryptocurrency. Robinhood doesn't allow you to put any cryptocurrency into your account or take any cryptocurrency out of your account. The only way you can actually trade on Robinhood is using U.S. dollars to get that Bitcoin. But then you can't use or get that Bitcoin out without selling the Bitcoin in Robinhood and taking out your USD.

So it's restricted because you can't actually use that Bitcoin to exchange for anything. 

So let's say you wanted to buy a laptop or a sandwich or whatever it is with your Bitcoin, or trade it with somebody else. You can't do that in Robinhood. You can only buy and sell the coin within it. That's why I call it a restricted exchange, and while it might work for some people based on what you want to do for me, I like to really maintain that control of my cryptocurrency. And that's why I go more of the direct route. That's not to say that this route is wrong, it's just to be aware of how trading on Robinhood Weibo with cryptocurrencies currently works. 

The next way is to either invest in companies that are directly involved in Bitcoin - for instance, there are companies that are dedicated to actually mining and being part of the Bitcoin process. Or investing in companies that are also invested in Bitcoin. This is something that's happened really strongly in the last year or so, with companies like MicroStrategy or Tesla or PayPal or Square. 

They have actually bought a significant amount of Bitcoin and have Bitcoin on their balance sheets, which means a portion of their business is dependent on how Bitcoin does. 

Using these companies as almost a proxy to invest in Bitcoin is still a great option, especially if you're not comfortable investing in Bitcoin directly. There's also another option besides picking these in particular stocks. You could invest in an ETF or an exchange traded fund and all this is simply a basket of these different stocks that either are invested in Bitcoin are part of the actual Bitcoin process, and this just allows you to be a little bit more diversified. 

Let's move on to our last topic about how you can get value out of Bitcoin. One of the last ways you can get value out of Bitcoin is super cool and super powerful, and that's actually lending out your Bitcoin to others. Let's go back a little bit to what I mentioned near the beginning of this video. 

The idea that when you put money into your bank account and the money that is currently sitting there in your checkings and savings account, any money that is in the bank is being used by that bank to make more money for the bank and they're passing just a fraction of the gains on your money back to you. So with Bitcoin, there's actually a different way. 

You have the choice if you want to lend out your Bitcoin to others. So there are companies that help you lend out your Bitcoin to others and one of the largest is BlockFi and I've actually got a link below so you can get up to $250 for signing up through my link.

The way these companies work is actually to allow the connection between lenders and borrowers of cryptocurrency, and the interest rates they provide for the different crypto currencies is a whole lot better than the banking industry. In fact the rates change, but right now you can get about 4% interest for lending out your Bitcoin and your Ethereum, which is way better than bank accounts.

 

Now before diving in and just going for that 4% or even up to 8% in some instances of these cryptocurrencies, you need to be aware of the risks, and I'm not going to be able to cover all of them. 

And that's where it's really important to do your own research and look into these before ever investing or choosing to lend out your cryptocurrency.

One risk is you no longer have control of that Bitcoin. They're going to use that to lend out to others. So the risk there is if the company gets hacked, there's potential loss of your Bitcoin. If the people they're lending to don't pay back their loan, there's risk that you won't get paid, and there are a few ways that BlockFi helps mitigate some of this risk. 

I'll put a link below (See Video Description on Youtube) to go check some of those sources out so that you can have a better idea of what those ways are, and it's some of these risks as well as the supply and demand for these different cryptocurrencies are why they're able to provide higher interest rates for these different cryptocurrencies that you're lending out. But at the end of the day, the most important part of this is that you have control and the choice of if you want to partake in this lending. Today, your dollars are being used by the bank, and you have no choice. They are doing that. They are spending your money on whatever they want to spend it on. 

You just have trust that your money will be there if you need it. Here in the cryptocurrency world you have control, you have the choice of what you want to do with your money and if you want to learn more, comment down below that you'd be interested in another video explaining more about BlockFi or ways to lend out your cryptocurrency.

To summarize briefly, you can 

1. Get value out of exchanging your Bitcoin for goods and services in a secure and quick manner globally. 
2. You can invest or trade in Bitcoin by either a direct exchange to get Bitcoin or through companies that invest in Bitcoin. 
3. And lastly this idea of lending where you have the option to lend out your bitcoins to others and get interest for doing that. 

So I hope that was helpful and that you were able to learn more about how you can get value out of Bitcoin.

🤑 Free $10 in Bitcoin [ Coinbase Sign-up ] https://bit.ly/3wusPIB

💰 Up to 8.5% APY + Up to $250 of BTC [ BlockFi ]: https://blockfi.com/?ref=4df2937e

Thanks so much for watching. 

I'm Brian Logen. 

Remember to stay healthy. Love your family. And elevate your wealth.