Bitcoin’s price has been going through a lot of ups and downs. One day the media praises Bitcoin (BTC) when the price reaches $12 000 but as soon as it goes down to $10 000, Bitcoin is a scam. Regardless, Bitcoin is still one of the best investment options available. The potential returns on Bitcoin are unsurpassed! Here are the top 4 rules to follow when investing in BTC.
Top 4 rules to follow when investing in BTC
Do Your Own Research (DYOR) is still as relevant today as it was two years ago. There are multiple tools one can use to ensure you are making the right investment choice. There are thousands of YouTubers who post informative cryptocurrency videos as well as bloggers/investors who publish informative content on Medium. Do not buy crypto without checking it out for yourself. #peaceofmind
Why are you buying Bitcoin? Is it a long-term investment or do you want to trade with it? What do you want to use the money for? Setting financial goals for yourself is just as important as buying cryptocurrencies. It will help you to make goal-driven decisions of whether or not to sell or hodl. Some investors believe that simply hodling will yield higher returns. It will also help you get through stages of price volatility to not FOMO.
Keep your cryptocurrencies on a hardware wallet
Keeping your valuable cryptocurrencies on an exchange can be risky. Exchanges being hacked and falling victim to cyber-attacks have become common. The best way to protect your cryptocurrencies is to own your private keys. Meaning, keep your cryptocurrencies on a hardware wallet that has multiple encrypted accesses.
Diversify your investment portfolio
Whilst Bitcoin is still king of cryptocurrencies, it is known for having wild price swings. Other cryptocurrencies may not be as volatile. For example, Ethereum, Litecoin, and Ripple tend to be fairly stable. With that said it is important to invest in different cryptocurrencies that could serve as a buffer against price volatility. If the one crypto is not doing so well, another may be doing very well. Balancing your portfolio allows one to retain the value of your investment.
For a quick overview of the cryptocurrency market, check out Coinmarketcap.