Bitcoin has become the most sensational topic among today’s people. News is all about bitcoin’s price hike, bitcoin holders millionaires and billionaires, companies’ acceptance, making money, trading, and lots of others. These bring people who are new to the crypto world, even those who have not ever made a stock investment too. As a result, with a lack of knowledge, they are finding themselves helpless most of the time. The digital currency market is comparatively new, and so before investing you need to think properly.
What is bitcoin investment?
Bitcoin investment is buying and selling bitcoin to make a profit. It is just like a traditional stock exchange or investment in commodities like gold. You buy those when the price is low and sell when the price is high. So, you made a profit in that gap.
Risks involved in bitcoin investment
There is no doubt that bitcoin is a good asset to invest in. We have records too in previous days. People who invested in bitcoin in 2020 or before when the price was under $14,000 gained a lot in 2021 when it skyrocketed at around $64,000.
- Bitcoin is a highly volatile currency. Its price goes ups and down again and again. So, as there is a chance to gain, there is a good chance to lose too.
- Bitcoin is a complete online network. It has no offline existence. When you will buy the currency you will also hold them online. So, if any cyber fraud happens, there is nothing to do.
- Bitcoins are limited to 21 million. As of now, over 19 million bitcoin have been created. So, the currency remains with just a little number and that can create a shortage.
- There is a risk to lose your money in a bitcoin trading exchange also if you select the wrong one.
How do minimize the risks?
Like all investments, good knowledge about the strategies can save you from loss in bitcoin investment.
- The most important thing that you can do as a new investor is not put all your life savings here. Less than 5% of the savings could be enough.
- Try to diversify the portfolio. Invest some amount in other well-performing cryptocurrencies too.
- Have a perfect plan and strategy to execute an investment. You can take an expert’s advice for that. You can also read articles like this one that is available on the internet to grow your knowledge.
- Chose the right bitcoin wallet. A cold wallet will be great though, keep it in a safe place.
- Read reviews about different investment exchanges and select the best one. For this instant, you can try the Official App which is easy to use for beginners. Monitoring the crypto market is a challenging task, but with this app you can easily get all the info along with an intuitive platform that makes trading easier.
The general guideline for bitcoin investment:
Bitcoin investment is simple and consists of a few steps.
- Registering in an exchange: This is the first step where you have to provide some IDs and go through a short and simple verification process and register yourself with a bitcoin trading exchange.
- Open trading account:After that, you need to open a bitcoin trading account in the exchange platform.
- Link and fund the account: For starting your investment you need to have some initial funding. So, you have to link the trading account with any of your bank accounts and transfer some funds from the bank account to the trading account. Check which are the essential documents that you need to upload.
- Buy bitcoin: Now you are ready to buy. Just know the current bitcoin rate, decide the amount of money you are going to invest, and select a buy order. You will receive bitcoin’s in your trading account.
- Sell bitcoin: After that, you can hold the bitcoins if you wish to do a long-term investment or you can hold them for a short period and sell them. Find out the best time and the value of digital currency, when you can start investing and reap heavy returns.
Bitcoin investment needs huge study and experience to be successful as it is a completely new asset. Though, it gives well return if you know the right strategy. Go through some of the best options that you have apart from Bitcoin, like Ethereum and Litecoin, Dogecoin etc. You can compare the features and benefits that you get from all the coins, and then start the process of investing.