As with any market, nothing is 100% certain, particularly the crypto market. For this reason, anyone’s guess about the market is as good as anyone else. As such, any investor seeking the best time to buy Bitcoin should be aware of its risk before venturing into it. Bitcoin and the cryptocurrency market at large are known to be very volatile.
The volatility of the crypto market is what many investors capitalize on to make a profit. In theory, they buy crypto when the price is low, and sell when it reaches its peak. However, it is more difficult than it sounds. In this article, we’d talk about two ways investors can get started with crypto investment, and why you should or shouldn’t invest in Bitcoin. So, let’s get started.
How to get started with Bitcoin?
Bitcoin investment is highly volatile and risky. But with great risk comes a big reward, hence why many people still venture into it.
As new investors, here are two things you need to know about Bitcoin investment.
Timing the market
Investing in Bitcoin or other cryptos in order to make a profit can be incredibly challenging considering you have to time the market. It is challenging because Bitcoin is more volatile than the average stock market. While, you must have heard of investors who timed the market at the right time and sold out their investment before a crash. Making this perfect market timing move is exhilarating. But what you may not have noted is that timing the market is hard, time-consuming, and may even cost you money. Missing a few days or hours could dramatically affect how much money you make.
Dollar-cost averaging
Dollar-cost averaging breaks your investment into portions at an equal time interval. Understanding how dollar-cost averaging works can help you mitigate the risk of long-term investment. Because committing to a schedule, you wouldn’t have to worry about whether the price is rising or dipping. Dollar-cost averaging is a strategy that helps you minimize the risk of buying crypto too soon or too late. Bitcoin investment comes with a lot of emotional stress, especially after a major loss.
Why should you invest in Bitcoin?
Could be mainstream one day.
If there is one thing, Bitcoin has made us understand in the past few years is that it has potential. While in the past few years its value has increased considerably, it hasn’t gotten to its peak yet. Bitcoin and crypto at large could be mainstream one day, and those who invested in it early enough could earn massively.
Minimalistic trading
Unlike stock trading, where you need to own a licence or a certificate to trade, Bitcoin investment is minimalistic. This means you do not need to go through a broker to trade. All you need to do is buy Bitcoin to your wallet from exchanges and sell when you want. Moreover, Bitcoin trading is instant, unlike stoke trading that may take days or weeks.
Liquidity
If you are still not convinced why you should invest in Bitcoin now, the fact that it is arguably the most liquid investment asset should convince you. Because of online brokerage, exchanges, and trading platforms, Bitcoin can easily be traded for assets like gold, and so on, at an incredibly low fee.
Lower inflation risk
Bitcoin is not regulated by any government, hence there is little to no risk of inflation. This is another good reason why Bitcoin investment is such a great idea. Also, considering blockchain technology is infinite, you wouldn’t have to worry about your crypto losing its value due to inflation.
Why you shouldn’t invest in Bitcoin?
Extremely volatile
One of the main concerns about Bitcoin investment is that it is highly volatile. While you may make a profit in the long run, you may not be able to tell how soon it will be. Not everyone has the stomach for a volatile investment. Hence, if you are the type to quickly panic, especially during a dip, avoid Bitcoin investment.
Highly speculative
Secondly, one of the biggest risks of Bitcoin investment is that no one knows what the future holds. Unlike the stock market, that can be predicted with some level of confidence because of its long track history. Cryptocurrency like Bitcoin can’t because it was launched only a few decades ago, hence there isn’t much to work with.
Conclusion
To sum things up, the best time to buy Bitcoin if you have the stomach to handle the rise and fall is now. Bitcoin like other cryptocurrencies has to such a spectacular potential to be one of the universally accepted currencies.
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