Cryptocurrencies have been successful in gaining significant momentum over the last decade. But the recent developments in the crypto space have pushed them further into the limelight, especially Bitcoin. Although much of it remains a mystery, it certainly has the town buzzing.
Thus, novice crypto investors are unable to understand how to invest in cryptocurrency, as most banks and mainstream brokerage platforms remain unwilling to participate. The price swings are also massive and extremely volatile by comparison with the traditional stock and bond markets. Recent developments demonstrate just how volatile the crypto space actually is.
Since the beginning of the year, Bitcoin has been on somewhat of a rollercoaster rise, registering dizzying gyrations. Within the first week of 2021, Bitcoin managed to cross the $42,000 mark. This price, however, soon started fluctuating, recording both sky-high rises and stomach-churning dips.
In April, Bitcoin managed to hit a new all-time high of $63,000 but the value plunged soon after. Over the next few weeks, it started to recover apart from the occasional drops. However, at present, the Bitcoin bears seem the be in full force as the price fell below $40,000.
Trading in the crypto space is no child’s play. It can be a scary place especially if you’re new to the unexplored world of digital currencies. Taking your first steps on the blockchain path can seem overwhelming but it is equally as important. The wrong choices at the start could leave you deeply in debt. Therefore, here is a guide to give you a push in the right direction towards a lucrative crypto future.
Have A Diverse Crypto Portfolio
This strategy includes investing in more than just one digital currency as it can help in maximizing profits and limiting the amount of risk involved. As the old adage goes, “never put all your eggs in one basket”. Conversely, if you opt to diversify your crypto investment portfolio by investing in different cryptocurrencies, you will be able to hedge the potential risk involved so you’re not too exposed to just one investment in case things go south.
The crypto space is extremely volatile with prices skyrocketing or plummeting in just a matter of minutes. Hence, you win some and lose some but it’s better than losing it all. Diversifying your portfolio to have your investment in different digital coins allows you to spread risk and stabilize gains. And although you may not be able to reap all the benefits of a particular coin rising to new highs, you won’t lose everything in case its price hits rock bottom.
Use Trading Platforms
The availability of trading platforms, software, and tools is a major contributing factor to the rising popularity of digital coins, especially Bitcoin. These platforms use advanced technologies such as Artificial Intelligence (AI) and Machine Learning (ML) along with powerful algorithms in order to generate trading signals. These together help traders make informed decisions, allowing them to capitalize on short-term crypto booms that happen due to the incredibly volatile nature of the crypto space.
While these platforms are used by seasoned investors as well, they have proven to be a safe haven for novice investors that are still learning the ropes to control the crypto beast. The auto-trading feature allows investors and traders to enjoy gains and raise profits without even having to take an active part in the trading process. This means that you won’t have to spend all your time with your eyes glued to the computer screen in order to catch the slightest movements. The trading program does that for you. You can check out the Bitqt website to get started with a similar auto-trading platform.
Ignore The Hype
The key to investing in cryptocurrency, just like you would with any other investment, would be to ignore the hype and filter out the noise pertaining to certain coins. While cryptocurrencies, such as Bitcoin, are driven by speculation, it may seem like a good idea to do what others are doing. However, it is important to remember that the tides can turn any second in the volatile crypto world. Therefore, instead of basing your decisions on what others in the market are doing, it is better to do your own research, take calculated risks and make informed decisions.
Identifying those with sufficient knowledge about trading and investment strategies will be just as important as identifying those who don’t. By doing so, you will be able to effectively filter information and develop your own strategies.
Only Invest What You Can Lose Any experienced investor will advise you to only invest the amount you can afford or stomach losing. The aim of any investment is to add more value to your wealth, not to lose it entirely. Thus, it is not only smart but also prudent to invest the amount you are willing to lose. In this way, even if you experience losses, they won’t completely wipe you out and won’t be as large or damaging as to alter your life altogether.
