2017 was very much the year for Bitcoin. It experienced exponential growth of around 1, 400%, making early adopters of the cryptocurrency millionaires at the same time. Even though the value of Bitcoin dipped and plateaued slightly later, Bitcoin remains a hugely lucrative market to invest in. There should be a reason why Bitcoin has been the buzzword on the lip area of many economists and financial traders, right?
However, if you’re a novice when it comes to investing in Bitcoin and cryptocurrency generally speaking, it’s essential that you do your research before parting with your hard-earned money. Our seven priceless tips will help to reduce the mistakes you make with your cryptocurrency trading.
1. Learn how to properly store your Bitcoin first
It’s important to learn to walk before you can run. Begin by learning the basics about the mechanics of buying and selling Bitcoin. You’ll need to read our reviews of all the leading Bitcoin exchanges first to discover the easiest and safest platforms to begin buying Bitcoin. Coinbase is commonly a good starting point for any beginner investor, credited to its intuitive interface and the ability to begin purchasing other leading cryptocurrencies too such as Ethereum, Bitcoin Cash and Litecoin. As with all financial investments, it’s essential that you learn how to protect your assets. In this case, you’ll need to ensure your digital assets are thoroughly guarded against the danger of cyber-attacks and scammers. There are purpose-built Bitcoin wallets designed with security at the forefront. Journal Nano S is the world’s most secure Bitcoin wallet, while TREZOR is also popular as it generates private keys to your Bitcoin wallet offline, far from prying eyes.
2. Look out on the market cap
A common mistake beginner crypto-traders make is to make investment decisions centered purely on coin price. In reality, the significance of a cryptocurrency is merely valid once you’ve taken into thing to consider the current circulating supply. If you’re considering buying Bitcoin, try not to focus too heavily on the current associated with the coin and instead think about the percentage of the total market cap you are purchasing. The closer a cryptocurrency gets to its market cap, the greater the demand will be to sell at a later date.
3. Is usually it worth investing in Bitcoin mining?
The industry for Bitcoin mining has more rapid at a rapid rate. In the earliest times of Bitcoin, the average home computer could be applied to crack the cryptographic puzzles and earn new Bitcoins. Unfortunately, in 2018, the only way Bitcoin mining is performed profitably is within specialised data centres. These warehouses are jam-packed with machines built only for the factors like mining Bitcoin. A home exploration procedure would cost in the millions to established up today, which means it’s probably far better to consider investing in Bitcoin that is already in circulation instead.
4. Consider diversifying your crypto investments
It’s all too easy for Bitcoin investors to become infatuated with the cryptocurrency. The reality is that Bitcoin is merely one of countless numbers of other cryptocurrencies available to invest in that could be used to offset some of your risk in Bitcoin. Intelligent cryptocurrency investing is the same as trading the stock markets or foreign exchange – you desire a danger management strategy. Don’t put your eggs in one basket! Instead, hedge your bets by investing in some of the up-and-coming altcoins experiencing growth corresponding to or better than Bitcoin.
5. Set a clear profit target when beginning a industry
As Bitcoin is still a relatively new market to invest in, it’s very difficult to know when the right time is to buy and sell your Bitcoin. Typically the volatility in the cost of Bitcoin is unlike anything most likely likely to have experienced before with financial investments, so it’s essential that you established clear profit and loss targets when opening a trade on Bitcoin. Most beginner Bitcoin traders are unsuccessful because they fall in love with their investments and don’t know when to let go of a bad position. By setting an exit point for profits and a stop loss should the trade go against you, it’s better to reduce losses and live to fight another day. Generally, the most extreme daily movements in the value of Bitcoin can be up to 3%.
6. Be prepared to manage FOMO
The dreaded concern of missing out (FOMO) is also another beginner mistake among Bitcoin investors. Should newcomers to trading Bitcoin log in to their chosen cryptocurrency exchange and witness double-digit growth in Bitcoin in the last 24 hours, they will invest regardless in fear of losing out on further price moves. What these investors don’t consider is that they have often missed the value in the price move that day – purchasing the asset high, rather than the old adage of buying low and selling high. The most profitable Bitcoin investors accept that they cannot catch every positive market move on Bitcoin. Instead, they will bide their some strike when the market conditions are most favourable e. g. the price has bottomed out there and is ready to move up again.
7. Accept that Bitcoin is a volatile, high-risk opportunity
Finally, if you’re heading to handle Bitcoin investing mentally, you need to get your head across the fact that it’s proceeding to be a bumpy ride. The volatility in Bitcoin is enough to scare off even the most experienced of traditional investors. Nevertheless, if most likely prepared to adopt a strict risk management strategy and consider diversification in other cryptocurrencies when necessary, there is no reason why you cannot turn this high-risk investment opportunity into a profitable one.
Become sure to review the most notable 40+ exchanges available to buy Bitcoin from here. The platforms ranked at the top of the table will have the best user ratings and are therefore considered the most reliable exchanges to industry Bitcoin using fiat values. Kickstart your crypto-trading quest today and choose the Bitcoin broker that’s best for you at Greatest Bitcoin Exchange!