In the last few years, Bitcoin had emerged as a viable alternative to cash based transactions- despite the skepticism of its opponents and lack of mass conception on its utility. It is volatile, and can be compared with the share market. It’s near impossible to foresee how and when the value will climb up or go down! Yet, it can’t be overlooked that some of the bitcoin investors have turned millionaires faster than even they thought it would happen! The Bitcoin sector is turning out to be a lucrative (albeit volatile) place to invest and a section of heavyweight investors are leaning towards it in an unprecedented way. While there are other crypto currencies that are also gaining Popularity-Bitcoin’s popularity shows no sign on waning anytime soon.
If you find Bitcoin worth your time and think of investing regardless of its unstable nature, it is quite important that you get the basics well. Go through a few useful tips for investing to ensure you can stay away from the pitfalls associated in Bitcoin trading and reap in profits without much delay.
Below are few useful tips for investing in cryptocurrency:
- Know where to trade Bitcoins
If you are new to the world of cryptocurrencies and Bitcoin and still think of investing, you must know about the storage options! It’s imperative that you learn the methods to buy and as sell Bitcoin. There are quite a few Bitcoin exchanges where you can do this. You should always look for an exchange which does not hold your cryptocurrency on your behalf and lets you be in control of your wallet.
- Choose a suitable wallet
Once you purchase Bitcoin or any other type of cryptocurrency, storing it safely becomes a priority. That is why you should zero in on a viable Bitcoin wallet. There are so many Bitcoin wallets out there and Ledger Nano S is deemed as the safest one. This is a hardware wallet developed by a French company named Ledger. You can also opt for the software Bitcoin wallets like Exodus, Jaxx, Electrum as they let you generate private keys offline Evaluate the pros and cons of each and see how they match your usage needs.
- Focus on market cap
A mistake many Bitcoin investors and newbies make is taking investment decisions solely only on coin price. However, to invest in any cryptocurrency including Bitcoin, it is essential that you consider the present circulating supply. So, you should not set aim solely on present value of such a coin but think of the overall market cap. When a cryptocurrency gets near to the market cap, the demand will go up and selling it later will be profitable.
- Bitcoin mining? not exactly for a beginner
It is hard to answer in a sentence if bitcoin mining is worth it or not! The answer depends on a lot of variables. The Bitcoin mining industry has evolved fast and now it is not exactly a beginner friendly process! Gone are those days when you could use your 3-year-old desktop for Bitcoin mining. It is now done in heavy duty specialized data centers. Not everyone has the deep wallets to invest in a Bitcoin mining setup. It also requires a lot of expertise in Cryptocurrency. So, it is probably more viable that you invest in existing Bitcoin.
- Diversification is actually good for crypto investments
Granted, Bitcoin still rules the cryptocurrency sector and most wallets support it over the other coins. However, you need not really put all your eggs in a single basket! You can also invest in other popular cryptocurrencies along with Bitcoin. However, evade from spending randomly and weigh in the pros and cons of each well. It is necessary to check the track record of such coins before you diversify the investment.
- Gear up to tackle FOMO and accept the volatile nature of the sector
No matter how expert a Bitcoin investor is, he/she can’t control the inherent volatile nature of the sector! So, prepare yourself for a bumpy ride anyway. No matter how wisely you buy, sell or invest in Bitcoins, some turmoil has to be dealt with. Having a balanced diversification strategy can be helpful. The fear of missing out or FOMO is something almost no Bitcoin trader can escape. Newcomers in Bitcoin trading tend to invest rapidly when they find huge Bitcoin growth in the last few hours. Even the most seasoned Bitcoin investors are unable to catch each positive market move! So, it makes sense to bide the time and when market conditions turn better again, sell out.