Bitcoins and cryptocurrencies, in general, have greatly transformed the way that we make payments. Just in the beginning of 2017 we saw the price of bitcoin at $1,000 and go up to $20,000 near the end of the same year. Seeing this rapid increase in price, people were quick to get into bitcoin investment and even now that bitcoin has gone down to about $8,000 people are still getting into the hype.
Looking to get into bitcoin trading? Here are some tips to help you get into bitcoin investment.
Just like with any form of investment, you should know about Bitcoin before you make any attempts at investing in it. It helps a lot if you are technologically savvy as you can quickly learn the underlying technology that is involved in bitcoin trading. Moreover, you can try and read Satoshi Nakamoto’s original 8-page white paper about bitcoin.
Risk is an inherent part of any investment, but it should be noted that upon getting into bitcoin investment, you will be exposed to a higher level of risk compared to more traditional assets. It is crucial to remember to only invest money that you can afford to lose, especially when it comes to bitcoin which may drop by more than $5,000 in value in just a span of 6 days. Try to be conservative and start with investing small amount of money. You can slowly increase it as you get more experienced and comfortable.
Get a bitcoin wallet if you want to start your bitcoin investment journey on the right foot. Exchanges should only be for buying and selling bitcoin and not for storing them. This is because many bitcoin exchanges have been victims of hacking in the past.
In one of the previous tips we looked at just how much value bitcoin can lose in just a small amount of time so it may not be a good idea to place all your eggs in one potentially volatile basket such as bitcoin.A great investment advice to always follow is to diversify your investments. Apart from your bitcoin investment, you should set aside capital for other cryptocurrencies and traditional assets like stocks. Thus, any losses that you may experience in one investment can potentially be offset by the gains made in other investments.