Are you looking forward to investing in Bitcoin? Its incredible rise in value over the past year has captured the attention of the general public. Who would have thought that Bitcoin’s price would increase by nearly 20 times in a matter of one year? Without a doubt, the cryptocurrency market is primed to attract even more investors. But before you shell out money, you need to know how to invest in Bitcoin without hurting your overall financial health.
You may have heard stories of people losing everything after putting all their money into Bitcoin. Its consistent upward trajectory last year had convinced people that it’s an easy ticket to financial freedom. After all, Bitcoin’s price seemed to double every month. Remember, though, that the cryptocurrency market isn’t a get-quick-rich scheme. The last thing you want is to invest all your money into such a speculative asset.
It’s worth noting that Bitcoin day-trading comes with high risks as well. Definitely, it isn’t for the faint of heart. Seeing Bitcoin’s price rise and fall by 10% every day might make you think it’s easy to turn in a profit. But trading without any technical analysis might bite you in the behind. Even as a complete beginner, you should invest time into learning how to use data and predictive analysis to make better trading decisions. Thankfully, trading platforms like Crypto CFD Trader make this process easier by helping you analyse the market before executing trades.
Another way to be a wiser Bitcoin investor is to store your virtual coins in a safe wallet. You should never leave your coins in cryptocurrency exchanges if you’re not actively trading. Many of these exchanges are the target of hackers. No matter how small or large your investment is, you should move it to an online wallet or cold storage
Offline wallets are generally safer than online wallets. These are usually stored on a computer without internet access. Some people even prefer paper wallets. These come with private keys which only you have access to. As long as you make sure that your wallet remains unconnected to the internet, your Bitcoins should be kept safe.
You may also want to think about diversifying your portfolio as a safeguard for the market’s extreme volatility. As Bitcoin’s price rises, the values of some altcoins may increase. Investing in altcoins can prove to be a nice way of hedging your bets on Bitcoin. You may want to start with the coins with the biggest market capitalisation as these are the ones with a proven history and reputable developer team.
Lastly, develop the habit of keeping up with the latest news in the world of cryptocurrency. All the technical jargon might confuse you at first, but you should eventually get a firm grasp of the market as you continue learning. Staying updated about what’s going on can help you make informed trading decisions, particularly in a market easily influenced by speculations.
It might seem like Bitcoin has slowed down, but the digital currency could very well be just getting started. Just like any other investment, Bitcoin comes with a certain level of risk. Be ready for its price to go up and down constantly. Learn to accept losses and minimise risks by knowing how to keep your coins as safe as possible.