Best advice before jumping into Bitcoin

Best advice before jumping into Bitcoin

Everyone knows what it takes to invest into the financial markets for a profit. You would know the risks that come with whichever platform you are going after and not too over-invest even if the market is good.

Bitcoin – The future of investment?

Bitcoin, the cryptocurrency or digital currency phenomenon that has taken the world by storm is one market you can venture into if you haven’t already done so. But is Bitcoin as lucrative as many claimed or is it more like a smokescreen that might vanish after a while and would it be an online scam?
Whether it works or not, you will have to be cautious before jumping into this market. Here are some really good advice.

Volatility of price

No matter what any one tells you, Bitcoin prices are very volatile. It could drop about 40% and then experience a spike increase of double or triple, all within a week. The best way to keep the price in check is to keep a Ledger hardware. This is something that requires certain technical knowledge which would be more suitable for the tech-savvy.

Timing is everything

You need to enter the market at the right time. This is not an easy task as there is never THE right time for investing. You can however, do some research on the price and behaviour before entering the market. This means that it would be good if you look for Altcoins which is less speculative as compared to Bitcoin. When you invest into Bitcoin, chances are you will have to wait for a longer time which is about a year at least.

Always do your homework

There is no shortcut to success. This simply means that you will have to do some homework before investing. The idea here is to understand the market and the behaviour or Bitcoin before you even consider injecting your funds. While Bitcoin can be a good option for investment, you must learn its mechanics.
To do this, you should learn more about the technology that Bitcoin operates on. The 2008 Satoshi white paper is a good point to start and it is short, concise and easy-to-understand. Once you learn about the technology, you get to know its behaviour better.

Be cautious and not be too greedy

It is easy to over-invest and you run the risk of getting burnt. Any sound investor will know that risk is inherent to any form of investment. Because digital currency is still very new in the financial markets, you can never fully expect what could happen in the near or long-term future. After all, the bond and stock markets have decades of history which in a way is more stable.

Pricing of Bitcoin

Experts will tell you that you should not be chasing Bitcoin prices. You should do your homework, decide on an entry point and then get in. Try not to buy Bitcoin all at once. The idea here is to invest a little, wait for a while and then invest a bit more.

Look for alternatives

Bitcoin is not the only currency you can invest into. There are several others that you might want to consider so as to diversity your investments. This includes the likes of:

  1. Litecoin
  2. Ethereum
  3. Ripple
  4. And many more