It would have been better to invest one year ago, two years ago or six years ago. But if you understand the potential and if your belief in their vision of money, today might be the best day possible to start investing in it.
- Do your homework
There is plenty of hype, rumor, success stories and tales of horror when it comes to Bitcoin and other digital currencies. Make sure you understand exactly what you’re getting into, and don’t risk more money than you could afford to lose.
Bitcoin is an exciting world to be in, but it is one that is complex and confusing if you only enter it on hype. Many people buy expensive cars, not knowing how the engine works, and that is fine because if it breaks there are mechanics and garages. In the cryptocurrency world, it is you against the world, it is decentralized and there is no one to hold your hand.
- Be cautious
In any investment there will be risk, but that risk is somewhat magnified by Bitcoin’s newness and extreme volatility.
“This is still an extremely high-risk space. Don’t invest money you can’t afford to lose!”
It is tempting to be bold and brazen, throwing money at Bitcoin after hearing the success stories, but especially as a first timer, caution is the better part of valor. There is no reason to look to become a millionaire overnight with Bitcoin, and by sinking huge amounts of capital in it from the start, you will be met with more problems than solutions.
- Diversify effectively
Most new digital currency enthusiasts hear first about Bitcoin, but there are thousands of other cryptocurrencies out there, and some have grown much faster than even Bitcoin. Diversification is wise, particularly since many of these “altcoins” perform well when Bitcoin drops.
- Keep coins off the exchanges
There is still a lot of hacking and thievery that goes on in the crypto space, and it is important to take precautions. It isn’t too hard to make hackers’ lives difficult. Use the exchanges for just that: exchanging. Once you have bought a currency, move the money off the exchange and into a wallet that only you control, such as a hardware wallet.
- Get ready for a wild ride
Bitcoin is notorious for its volatility, so much so that many traditional investors are terrified of it. A massive drop in Bitcoin’s price does not spell permanent disaster, but it is hard to stay committed when you start heading into the red.
Diversification is a great strategy to help with that, but it takes some thought and effort. Of course, the most famous (and so far, successful) Bitcoin strategy of all is to ‘hodl’ - or hold onto - your investment no matter the market volatility.
You can also buy and forget, as not keeping an eye on the market can help keep you from worrying about the dips and miss the volatility.
PS: buy the rumors sell the news