I began investing in Bitcoin and several other cryptocurrencies a couple years ago or so. I had been reading a lot about them and doing a lot of research and decided to take the plunge and “get a little skin in the game” as they say. Now strict investing isn’t the only way I am currently involved with crypto but I will save those details for another day. I wanted to share with you some lessons I have learned over the past couple years or so that have helped me multiply my crypto portfolio balance by quite a bit.
By now it is beyond a well known fact that investing in both Bitcoin and other alt coins
can be very risky due to market volitility. The other thing to keep in mind is that being
virtual and electronic in nature, none of these cryptocurrencies have any physical attributes.
However, despite the fact that cryptocurrencies do not have any intrinsic value, nobody can easily dismiss the potential value and huge upside of such currencies and the super amazing blockchain technology behind them. You may have read in the news about people who had invested heavily into Bitcoin during the early inception. Many of these people are now living their lives as multi-millionaires or even billionaires in some cases!
There is no doubt that crypto currency has amazing investing potential. However, doing it the correct way and making sure that you profit from it is not quite always as easy as it sounds. If you have visions of being a wise crypto investor in the future, you would be wise to follow these following approaches to help you succeed.
#1 Prepare for volatility
I am sure that by this point you have read a decent amount about cryptocurrency and I am willing to bet you that in just about everything you have read, there is at least one theme that keeps standing out – major volitility!
If you look closely and carefully analyse recent market valuations for any crypto like Bitcoin,
you will have most likely noticed that at one moment the coin is sitting comfortably above the 5 figure mark, only for it to dip well into the 4 figure range in less than an hour!
It is really crucial that you understand the fact that cryptocurrencies such as Bitcoin are more than unpredictable and you will get yourself into quite a sticky situation if you do not pay close attention to this very real detail. In the event if a substantial (and eventual) dip in price, it is very easy for one to start to panic and start to sell the coin in order to minimize losses.
If you are smart, you will develope a mindset that will prepare yourself regarding this kind of scenario. You will simply see the price dip, take it with a grain of salt and rest easy knowing that you can go to bed and wake up the next morning witht he knowledge that tomorrow may yield a much better outcome and that the price can and usually will increase yet again. While it is indeed a challenge to adopt this mindset and attitude, I can tell you that if you can manage it, it will serve you very very well as an investor in cryptocurrencies.
#2 Proceed with caution
This is one of the most important rules in investing, regardless of the market. Always do very thorough research before you begine to put large sums of money into any coin. This is the same no matter if it is Bitcoin, Ethereum, Litecoin or any other alt coin for that matter. You don’t want to lose all your investment in a single day trade for example. In fact, most people invest in cryptocurrency to make a large profit in the long term. So, do not place all of your life savings into something without doing your fair share of research.
I would also like to add the old saying of “never invest more than you can afford to lose”.
If you follow this advice, you should do very well.
#3 Diversify your portfolio
The old and often said proverb of not putting all your eggs in one basket still rings true to this day and for very good reason. Just because it is popular to invest in Bitcoin, does NOT mean it is a wise decision to put ALL your money into it! It is worth looking into other additional cryptocurrencies as well as Bitcoin. Even better, become a more sophisticated investor and greatly consider other addtional assets that are more traditional such as “boring” things like mutual funds, stocks, ETFs bonds and things of that nature
This is a wise move because should the price of bitcoin drop drastically, then you have your other investments to help keep you afloat and out of the red.
#4 Store your coins in a cold wallet
Now it is important to clarify that this pertains to investing and not trading. Investing means you are in it for the long haul. This means 5, 10, 15 years or more. If you are investing with no intentions or ambitions of trading, then it is highly recommended that you keep the coins safe that you invested in. Keeping them safe means making sure that they cannot be hacked. Keeping your coins in cold storage or “hard wallets” are one of the safest ways to store coins because they are not connected to cyberspace which means hackers have no way of getting to them.
Keeping your invested coins in either a mobile phone wallet or a cryptocurrency exchange wallet is not the safest thing to do and not advisable. This is because it is substantially less safe. If you are a trader, (using either a day trading style or more of a swing trading style) then it makes sense to keep the majority of your coins in some exchanges where they can be actively making you even more cryptocurrency.
However, people that are just buying cryptocurrency as a way to invest and just want to hang onto it for a few years are highly advised to store them in a hard wallet. You can find some of the most popular wallets (including hard storage wallets) HERE
#5 Keep the faith
This one kind of relates to number one about volitility. The market will go up and down. SOmetimes it will spike way up. SOmetimes it will drop like a rock until you think it will hit zero. This is all to be expected. Keep the faith. The reason I say this is because blockshain technology is being implemented in both large and small companies at a simply staggering rate. There is no way on earth the cryptocurrency market is going to dry up and disappear forever. The driving force behind Bitcoin and cryptocurrency in general is the blockchain technology behind it. With blockchain technology being implemented even more and more every single day, the only eventual direction of the market is up. It may have some spikes and dips. But in the long run, this market is still in it’s infancy and will only skyrocket in the next five to ten years compared to what it is today.
#5 Have a strategy
I see people fail at this more than just about anything else. They think they can set up a coinbase account, buy a couple hundred bucks or so of cryptocurrency and BOOM! Overnight millionaire! Am I right?
Sadly, I’m afraid that I can tell you from experience that this is not, in fact the way it works. If you have been interested in crypto for any length of time, I am sure that you are more than well aware of this yourself. So, what is the answer to this. The answer is having a tried and true strategy that makes sense and builds upon itself. I am not going to lie. It took me a couple years or so before I got my strategy right but now it is running and purring like a well oiled machine. You can see how this strategy works and get a day by day strategy guide emailed to you with the steps to take care of each day. You can find this guide by clicking the banner below.
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