Like any other high-risk investment, it is best to first look at the trends of bitcoin value at the time you’re planning to invest. Second, invest with a small but affordable amount of money. $20 is decent enough, but most people start with $50. In this way, it will seem as if you’ve just bought a moderately-priced pair of shoes.
Of course, each person comes with a different financial budget and background. In any investment, it is best to only invest money that you can afford to lose.
Ask yourself: is one pair of shoes something I can afford to lose? Or should I lower it down a bit so it seems like I’ve just bought several Starbucks drinks? Remember, only put in the amount of money which you are comfortable with. Do not invest everything and leave nothing for yourself. That will be too risky especially if it is your first-ever investment.
Yes, it is important to note that bitcoin is currently stepping up the market ladder, but choosing to convert all your money into something virtual, solely because of that fact, does not make it a smart decision. Before you start investing, assess yourself and your risk tolerance. Am I naturally a risk-taker, or am I someone who gets anxious with the uncertainties that may come with it? If you enjoy the rollercoaster ride of investing, the gamble may be worth it and, who knows? Maybe you’ll hit a jackpot after taking such risks.
If you ask yourself, “How much should I invest in Bitcoin?”, you should start by looking at your investment capital. The safest range of percentage would be somewhere around 5% to 30%. The riskiest you could get in that “safe range” would be 30%, but as mentioned above, you can always invest more if you can do so.
Right now, as of the first quarter of 2021, one single bitcoin has a value of $40,000. How then can you start investing? What is really great about bitcoin is that you don’t have to buy a whole coin; you can purchase fractions of that coin for a cheap price.
Let us say that you are willing to invest $40 for your first transaction. You can buy 0.001 bitcoin with that budget. Now, say that you’ve purchased that fraction of a bitcoin in February. For about half a year or six months, you are closely looking at the highs and lows of its value. In April of the same year, the value dropped to $35,000, so obviously, you won’t be getting any profit if you decide to sell your bitcoin in that month. However, you saw that August experienced a spike in value. What was $40,000 for each bitcoin increased to a whopping $60,000? This means that, if you decide to sell your 0.001 bitcoin now, you’ll have your $40 back, plus a $20 profit.
Now, imagine that you invested $400 in the first place. You’ll have earned an extra $200 now. And imagine if you purchased one whole bitcoin: this means that you’ll have earned $20,000 more. Oh, the many possibilities of cryptocurrency.
Of course, the trick here is to keep track of the bitcoin value, so you will know when to buy and when to sell. It is also good to be patient and to practice your ability to predict its performance in the market.
Another thing to note is that the bitcoin’s drop in value is not always a bad thing. In fact, it may even be the best time for you to buy more bitcoins. What comes next is waiting for its value to go back up, so that you are guaranteed some profit when you sell it to other users.
In the world of Bitcoin, it is important to know the concept of Buy and Hodl, which is an intentional misspelling of the word “hold”. This pertains to the process of buying bitcoins and “holding” onto them for dear life. If you know someone who is like this, or if you eventually become someone like this, know that the proper term for that is a “holder”. These holders are people who believe in Bitcoin’s potential and prosperity in the long-term. They assert that, even if the value of bitcoin decreases every now and then, it does not stop the cryptocurrency from attaining higher value a couple years from now.
Over the months, you may steadily increase the amount of money you invest in Bitcoin. This is, of course, depending on your performance and how much you gained back. If you think smart, remain patient, and act carefully, investing in bitcoin will become the best decision you made in your life.