Crypto & Blockchain

Tips for Investing in Bitcoin

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If you haven’t thought about investing in Bitcoin at least once, you are in the minority. Right now, there are thousands of people checking the price of Bitcoin to see if they’ve made or lost money in the short time since they last checked.

Since we are nearing Year 15 of Bitcoin, a few tips can go a long way for new investors. Keep these in mind, and you just might be able to ride the wave of shifting Bitcoin prices to a bit of success.

Do Your Homework

We hear the success stories, but not many of the failures. Most of those are because people just jumped in headfirst without having a clue how any of this works. You aren’t going to log into your wallet one day and magically have millions of dollars in crypto waiting for you. It just doesn’t work that way.

Do your homework and look into realistic trends that result in positive outcomes. Having more information is always a good thing, especially when it comes to something as volatile as crypto. When you jump in blind, you are going to find out what it is like to get hurt by a sudden Bitcoin crash.

Beware of “the Dip”

The most common thing you will hear from other Bitcoin investors is, “buy the dip.” Basically, it means that you should get in on Bitcoin and other cryptocurrency when there is a decline. The idea– buy low, sell high – might seem pretty simple to understand, but there is more to it than that.

If anything, look at the volatility of the cryptocurrency market as a sign to stay away. A huge drop isn’t necessarily the best time to buy. If you notice a small uptick shortly after the crash, that can at least give you an indication that things are turning around. Would you buy some other investment after it just tanked? The answer is “probably not,” so the same rule should apply when investing in cryptocurrency. Watch the dip, but don’t invest on a knee-jerk reaction.

Limit Your Use of Leverage

You’ll probably hear the term “leverage” thrown around a bit. While it is considered a good thing to have, leverage can also increase the chances of liquidation. If you want to get less technical about it, that means losing all the money you have invested in Bitcoin.

Leveraging can be very beneficial, unless you are doing it wrong. If you leverage high, something like 1:1000, then even a 1% deflection in price can thank you. If you don’t really understand how leverage works, stay away altogether. The simpler you can keep your investing, the better a shot you have at walking way with money in your pocket.

Don’t Worry About Missing Out

A good reason that people lose everything to have is because they don’t want to miss out on the next meteoric rise. You’ll hear it called FOMO, and it is a common feeling that spreads across the investment world. More often than not, that fear of missing out leads to a lot of sad investors.

FOMO will lead investors to follow news, rumors, and trends that often result in reckless actions. If you are being told to trade cryptocurrencies you don’t quite get, deposit substantially more, increase your trading volumes, or increase your trading lots, pump the brakes. These are trends and fads that usually go away for a reason. Take a deep breath and remember that cryptocurrency is a long haul play, not a “get rich quick scheme” that will pay off overnight.

SMEStreet Edit Desk

SMEStreet Edit Desk is a small group of excited and motivated journalists and editors who are committed to building MSME ecosystem through valuable information and knowledge spread.

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