So you want to be a millionaire? There are many paths you can take to reach your goal. Some are much slower than others, though much more secure. Let’s have a look at Bitcoin investments-top tips and best practices.
If you are looking for a faster, riskier, and sexier approach, Bitcoin investments are the way to go. During certain time periods, the value of Bitcoin can jump dramatically.
For example, this year alone, Bitcoin has reached a growth of over 70% in value. Other similar spikes in value have happened over the previous months and years.
That means that if you invest quite a bit into Bitcoin, and it continues to experience sharp spikes, you can make a lot of money really fast. But if you are new to buying Bitcoin, there are a few things you should know before getting started.
Keep reading to discover the most important tips for investing in cryptocurrency for the first time.
Table of Contents
Understand Bitcoin Lingo
Whenever you are investing money into something, you had better understand it inside and out. After all, if you don’t understand what you are investing in, you might as well invest your money into the toilet.
Education is key when it comes to being a successful investor. For starters, that means understanding the lingo.
Bitcoin is one form of cryptocurrency. There are many other forms of cryptocurrencies.
Cryptocurrency is a digital, decentralized currency that can transcend political and geographical borders, preventing the government from controlling or affecting the value and use of a given currency.
In the past, you invested in Bitcoin by purchasing an entire Bitcoin. Because an individual Bitcoin is worth so much money today, new investors can begin by investing in smaller Bitcoin units, such as a bit. These essentially function like pennies and dimes when compared to a dollar.
Lay Your Foundation
If you want to start investing in Bitcoin, there are a few things you’ll need. First off, you’ll need to create an account on a platform to buy and sell.
There are many to choose from. The biggest consideration when choosing a platform to buy on is the fees. Some platforms charge higher fees but might have more features that you need.
Those who get into Bitcoin trading, making many transactions a day, opt for platforms with smaller fees. But if you are a simple investor, looking to buy and hold, you may not be as concerned with transaction fees.
After choosing an investing platform, you’ll need a wallet. A crypto wallet allows you to securely store your cryptocurrencies, such as Bitcoin, and any other cryptos that you buy.
You can start by using a mobile app, that works well for new investors and those with smaller sums of money in cryptocurrency. But once you start amassing large amounts of crypto, you’ll want to purchase an external wallet, that essentially functions as a hard drive for your cryptocurrency.
Decide on a Budget
When you first start investing, particularly with something as enticing as Bitcoin, it can be tempting to invest too much, too soon. You shouldn’t empty your savings account, buying as much Bitcoin as you can, because you heard someone say that a spike is coming. Never invest money you aren’t willing to lose, as all types of investing are inherently risky.
Instead, be a responsible adult and set a monthly investing budget. The standard advice is to commit 10% of your monthly income to investments. This should be your baseline.
If you can find a way to cut expenses or forgo expensive restaurants and drinks, you can pour even more into your investment accounts. For best results, set up an automatic deposit from your bank account each month into your crypto trading account.
This will ensure you don’t spend the money on something stupid, like your 12th pair of shoes.
Don’t Sell In Fear
Crypto is extremely volatile. That means that at any given moment, the value can either plummet or skyrocket.
Experienced crypto investors are aware of the volatility and aren’t scared by it. Because swings can happen daily, depending on what’s on the news or what’s being said on Twitter, you should expect the value to move all the time.
The worst thing you can do is sell your Bitcoin when the value is dropping. When you do this, you lose money. Someone else buys your Bitcoin at a discount, waits for it to jump back up in value, and makes money off of your mistake.
If you want to make money and grow your investments, stick with it for the long haul. When the value drops, don’t sell. Buy more at a discount.
Bitcoin is valuable, just like money. Since hackers are always trying to make a quick buck, you can be confident that they will be coming after your crypto.
Cybersecurity is of the utmost importance to protect your investment as well as your personal information. That means password-protecting your phone and any relevant apps on your phone.
It also means using two-factor identification, which dramatically increases your level of security, preventing unwanted access to your accounts.
Also, use common sense when buying or selling online or in person. Because Bitcoin and other cryptos are unregulated, there are no authorities to reach out to if you get scammed out of your cryptocurrencies.
Don’t Brag About Your Bitcoin Investments
Let’s face it, if you have a lot of money, you want to show it off. That means you’ll probably buy nice cars, nice watches, and expensive clothes. That’s all fine and dandy.
But it’s best not to tell anyone how much Bitcoin you have stored up in your wallet. Even so-called friends could get jealous and turn on you if they knew how much you really had.
Keep your investments, and the size of your investments, private at all times.
Choosing the Best Investments
Bitcoin investments are some of the best investments you can make on your journey to true wealth and financial freedom. With infinite room for growth, cryptocurrencies are poised to bring a financial revolution to both the global economy and your personal financial situation.
Just be smart about how you buy and hold your investments. The most important thing is to use common sense.
Looking for more tips like this? Check out our blog today for more information.