5 Tips for New Bitcoin Investors
It’s scary to take risks and enter the world of cryptocurrencies. There is no central authority to hold your hand, and rumors and stories about digital currencies can cause you concern.
Fortunately, the cryptocurrency community is very helpful and there is no limit to good advice.. In a recent Forbes article, the author summarizes the most important things to keep in mind in just 5 points.
With these simple tips, your first Bitcoin transaction or trade can be less stressful.
Do Your Homework
When it comes to bitcoin and other digital currencies, rumors, success stories and horror stories abound. Make sure you understand exactly what you’re doing and don’t risk more money than you’re willing to lose.
Bitcoin is an exciting world to be in, but you’ll find yourself in a messy and confusing situation if you only get into it on exaggerated reviews.. Many people buy expensive cars not knowing how the engine works and this is not a problem because if the car breaks down it can be taken for repair. In the cryptocurrency world, it’s you against the world, you’re in a decentralized place and there’s no one to hold your hand.
Pawel Kuskowski, CEO and founder of Coinfirm, made this advice:
“The more you understand, the more you earn”.
Don’t guess about the big money to be made, go out and learn how Bitcoin and Blockchain work. Lucas Geiger, Founder and CEO of Wireline, said:
“This may seem obvious, but I think the first thing to do is to take the time to understand Blockchain. I say this because I know very few people will. The great thing about it is that there is a huge amount of material and information out there.. Lots of websites and resources aim to make the technology easier to understand.
Moreover, the investment world is trying to make things easier by making Bitcoin more suitable for traditional investors.
Be careful
There will be risk in any investment, but that risk has grown a bit due to Bitcoin’s novelty and extreme volatility. As Eliosoff put it:
“This is still a high-risk area. Don’t invest money you can’t afford to lose!”
After hearing success stories, it’s tempting to invest money in Bitcoin and be bold and flamboyant, but for first-time investors to be careful is the most important part of courage. There’s no need to wait to become an overnight millionaire with Bitcoin, and you’ll run into more problems than solutions if you sink large amounts of capital right from the start.
Marshall Swatt, a serial entrepreneur, suggested:
“Start small and invest a small portion of your capital”.
In addition, the recommendation of Tim Enneking, Managing Director of Crypto Asset Management Here’s how:
“Don’t follow bitcoin prices, decide on an entry point and stick to it. With Bitcoin you are almost always right in terms of predictable price action – your timing may not be right so be patient and wait for the Bitcoin price to come to you.”
There are a number of investment strategies that work really well with Bitcoin and the most successful are the most cautious.
Things like ‘Dollar Cost Averaging’, which deposits the same amount at the same time every week or month, is a great strategy for Bitcoin and will help you get to the lows as well as the highs.
Diversifying Effectively
Most new digital currency enthusiasts first learn about Bitcoin, but there are thousands of cryptocurrencies out there, and some are growing even faster than Bitcoin. Diversification is wise, especially since most alternative cryptocurrencies are performing well when Bitcoin drops. As tech entrepreneur Oliver Isaacs writes:
“Be wary of volatility and don’t put all your eggs in one basket, it’s like investing in the stock market or FX, putting your funds in one You should diversify as a risk management technique.”
Famous stock collector Ronnie Moas favors diversification. It’s easy to get caught up in a cryptocurrency, especially Bitcoin, but it’s important to protect your portfolio.
Warning everyone not to put all cryptocurrencies in Bitcoin, Moas said:
“ You need to diversify between more than 1000 names. Concentrate on the top 50 names”.
Keep Cryptocurrencies Away from Exchanges
There is still a lot of cyberattack and theft going on in the cryptocurrency space, so it’s very important to take action. important. It’s not that hard to make the life of hackers difficult. Use exchanges for trading only. After purchasing a currency, move the money away from the exchange and into a wallet that you only control (for example, a hardware wallet).
Many people have suffered from cyber attacks on the exchange, most notably Mt. Gox. However, many people have lost a lot of money lately thanks to accusations against BTC-e and its CEOs.
Founder and CEO of IComply Investor Services Inc. Matthew Unger suggested:
“Just like the money you save in your wallet or bank account, and perhaps your valuables in the safe, you need to manage digital currencies in the same way.”
Get Ready for a Crazy Journey
Bitcoin is well-known for its volatility and many traditional investors are afraid to invest because of it.. A massive drop in Bitcoin price won’t cause permanent disaster, but it’s hard to commit if the situation doesn’t improve.
Diversification is an excellent strategy to help with this, but it takes some thought and effort. Of course, the most famous (and so far successful) Bitcoin strategy is to hold on to your investment, no matter how volatile the markets are. You can have it and forget it.
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