Are you new to the cryptocurrency and planning to try your luck with Bitcoin? Well, despite several criticisms, Bitcoin is the darling of modern investors today. As per the market pundits, Bitcoin price is about to reach minimum $50,000-$60,000 by the end of this year. Put simply, Bitcoin shows an upward trend and it would be smarter not to miss out on the BTC fever.
The post below offers some expert tips to remember while investing in Bitcoin.
Be careful of market cap
Yes, Bitcoin’s price is important while you are planning for investments but market cap is even more important. What is market cap? It’s the sum of coins x price of these coins. New investors are mostly focused on Bitcoin’s price. It’s to stress here value of BTC is valid only when you consider the present circulating supply. So, don’t just stress on price but focus more on percentage of market cap that you are planning to purchase. The closer Bitcoin gets to market cap, greater will be the demand to sell the coin at a potential date later.
Keep yourself updated
Cryptocurrency carries a highly volatile market- more volatile than other form of investment mediums. Thus, a smart investor should always stay updated about the latest trends and price fluctuations to ensure an informed trading decision.
How much to invest?
Now, this is one of the most common questions among new Bitcoin investors.
The best suggestion here is to start small. Your investment amount should be lesser to 10% to your whole capital. Yes, it’s true that experts have made several positive predictions but don’t forget you are new to the scene. Thus, start with a little amount till you get acquainted with the nuances of the market. You must fix a specific entry point & stick to it.
Store Bitcoin in a secure wallet
You will have to sign up with a crypto exchange for trading but don’t put all your money on it. You should only deposit the amount that you wish to trade off soon. The rest of the amount should be kept in a separate wallet. If you keep all the money in the exchange’s wallet, you cannot ever get access to your coins if the exchange suffers a crash. You can choose from both 3rd party online and offline Bitcoin wallets. However, a lot of investors feel offline wallets are more secured.
Last but not the least, try to diversify. Do not just put the whole investment capital in Bitcoin. Save some for other digital currencies as well for backup plan.