What is the secret of investing in Bitcoin and cryptocurrencies? Over the last six months, the price of Bitcoin has trebled and the price of Ethereum, Ripple and other crypto coins has gone up tenfold. One of the main reasons for this is the growing interest from investors and the latest wave noobs stashing Bitcoin out of fear of missing out. For one reason or another people from all backgrounds are starting to believe in the potential of the blockchain technologies. The main presumption on which this new digital gold rush is based is that
Over the next 10 years the price of one Bitcoin can reach $100,000
If I could only have 0.1 of a Bitcoin every time I heard this claim. There are indeed numerous claims from renowned financial experts around the globe, who have presented their analysis and forecasts, as to why Bitcoin is to reach these astronomical heights, and why the blockchain technology will change the world.
Indeed, it is likely that in the future many financial institutions and businesses will base their transactions on blockchain technology. At the same time, it is also highly likely that a vast number of altcoins will have ceased to exist in 10 years time, as the technology matures and its true potential is uncovered.
Let’s face it, the reason you are reading this article is your intuition, which tells you that Bitcoin and the blockchain technology are not just the next viral internet trend.
So what is the secret of investing in bitcoin?
This would clearly depend on your own intuition. Whether you believe that in the next five to ten years the price of bitcoin will be close to zero or in the tens and hundreds of thousands. Any attempt to cash in on a $100 rise or fall is negligible (this is not meant for day-traders). Of course, there is the risk of your chosen altcoin to devalue to the point of zero.
Some basic cryptocurrency buying tips for beginners
You should only ever invest an amount of money that you won’t need over the next few years. Better even, you should be prepared to take the risk and be ok if in the worst case scenario you end up losing this amount.
If you believe in the concept and you are ready to invest your money in digital currency, then first you will have to get your hands on Bitcoin, which will enable you to purchase other crypto coins. Try to buy your Bitcoin when the price is low. Monitor the chart patiently. If there has been a steep increase (looks like a 90-degree wall on the chart) for some days or weeks even, it is probably best to wait for the inevitable drop/correction.
For example in June, Bitcoin reached a staggering $3,040 before the market correction and dip. It is now trading at around $2,500. But be careful, don’t wait too long. It may be that you will never get the chance to buy Bitcoin this cheap again.
It is important to research the application of an altcoin before investing in it. To test it, ask yourself if the particular crypto coin is solving a problem.
You shouldn’t buy in bulk ie. invest all your money to buy in one transaction. It is most likely better to invest smaller amounts regularly so that you can buy at an average price, and avoid a panic attack when/if the price drops the day after your purchase.
What is HODL?
The second part of the “secret” is that hodling your crypto coins if you believe in them, can be a successful tactic. Hodling, is when you HODL, or Hold on for Dear Life to your crypto coins when they are going up or down in value and you are thinking of minimising losses or making a profit to rebuy again at a lower price. HODL unless you have, for whatever reason decided that the long-term potential of the coin has diminished. As time has shown the lucky once are not the ones who had the opportunity to buy bitcoins at $10 and sold at $100 – $200, but the ones who bought at $10, $200, $500, $1000 and so on and hodled through thick and thin.
Disclaimer: This article is for information and entertainment purposes only and should never be construed as investment or trading advice. Bitcoin and other cryptocurrencies can be extremely volatile and you should always do your due diligence and research on the topic, utility, product or service and legal and regulatory requirements before deciding to invest. We do not take any responsibility for possible losses you may incur.