Even if you know nothing about cryptocurrency, you know that Bitcoin rules. The highest-valued cryptocurrency, Bitcoin is often the focal point of investors from around the world. Which means keeping a close eye on current prices.
There are a few tips that can help you when it comes to following the Bitcoin price. Follow these tips and you can help yourself avoid the massive swings that have generally come with investing in the leader in cryptocurrency.
Know the technology
Take a minute to learn about blockchain technology before you even consider investing in Bitcoin. While it isn’t a prerequisite for investing in cryptocurrency, believing in the technology can certainly be a helpful trait to possess.
The entire foundation of cryptocurrency centers around the blockchain. The blockchain is a series of secure ledgers that show the history of each transaction. The blockchain is a series of transactions that have been encrypted and can’t be changed after the fact. The core concept was to create a way to conduct transactions without a bank or other entity.
Having a core belief in the technology can help when it comes to having patience for Bitcoin. Seeing the volatility of the prices (more on that later) can make it difficult to hold strong. But with a strong belief in the tech, weathering the storm can become easier.
Don’t panic
You would have to live under a rock to not have heard about the sheer volatility of Bitcoin. Since being created in 2009, prices have risen quickly, sometimes in a matter of days. It currently remains one of the most valuable investments to have.
That said, Bitcoin prices have also been known for massive falls. The crashes began early, seeing Bitcoin hit $32 per coin in June 2011 before crashing back to $0.01 in a few days. Another major loss happened in 2015, going from $1,000 to under $200. Yet again in December 2017, going from $20,000 to below $3,200. Sizable crashes have.
Part of investing in Bitcoin is having an understanding that crashes are just par for the course. Investors today at least have history to look at and can see that Bitcoin has always gone back up when facing a huge crash.
Stay in it for the long haul
Take a step back before you invest in Bitcoin and read that last paragraph a few more times. There are far too many investors who get into Bitcoin looking to make a major profit in short order. And while it is possible, many people try their hand at day trading and wind up failing.
If you are going to invest in Bitcoin, be in it for the long haul. Pay attention to trends, ride the highs and lows, and keep your investment in mind. That said, have a plan. It is hard knowing when the “peak” or “valley” will occur but making a snap decision could wind up costing thousands at any time.
Don’t bet the farm
We hear stories about those who invested all they had into Bitcoin and walked away as a success story. The ones you don’t hear about are those who bet it all and lost. It is a simple investment strategy: don’t put all of your eggs into one basket.
Invest what you can in Bitcoin, sure, but don’t get overzealous. That kind of mentality is also the kind of mentality that leads to selling in the middle of a plummet, leading to further loss. Invest reasonably and keep yourself from suffering a loss that will leave you questioning your decision for years to come.
