With the recent surge in the demand of bitcoin, it is not unusual that your interest is piqued at this stage. You want to know why people are investing. Before you jump on the ride however, there are some things you should know that would help you make the wisest decisions as far as the volatile world of cryptocurrency is concerned.
This article would act as a beginner's guide to investing in cryptocurrencies while giving some basic pitfalls that beginners should avoid at all costs.
Bitcoin is a type of digital currency used for worldwide transactions, it is the most popular and most valuable of all the over 1300 cryptocurrencies currently in circulation. In 2017, the world witnessed in utter amazement how bitcoins leaped through heights that we never envisaged. For people who had investments, they were perhaps the happiest individuals on earth while for those of us who had shown passive interests, it was time to weigh our options and choose our investment wisely.
With other cryptocurrencies not looking to catch up soon, Bitcoin is still perhaps the best investment for you if you are considering investing.
Common pitfalls beginners should avoid
Yes, Bitcoin is the most valuable cryptocurrency in the world and yes, it's easy to feel like you must invest. Perhaps you should invest, but these are the common pitfalls you should avoid:
- Not reading up properly: The worst mistake you can make when planning on investing in any business venture is not fortifying yourself with enough knowledge on the subject matter. Given the nature of bitcoins (the crypto world is a largely unregulated one) it is very important that you understand fully the nature of bitcoins.
- Not observing market trends: There are times to invest and there are times you simply shouldn’t. If you invest your money into bitcoins without observing properly the market trends, you might be setting yourself up for a long investment return wait. The best part about investing in cryptocurrency is the ability to gain returns speedily so you should observe market trends to know when to buy and trade to help you make great returns.
- Trading with emotions: You have to be dogged when making investment decisions. Avoid investing because the world is. Be sure this is what you want before going for it; know when it is right for you to hold on to your coins and when they should be traded.
- Not securing your bitcoins yourself: As stated earlier, the market is highly volatile. There are steps to take when buying bitcoins and one of the most important steps is having a wallet where you can transfer your coins into. Never leave your coins on an exchange platform! There are hardware wallets and soft ware wallets; they operate like applications that can be easily downloaded to our mobile phones or computers. If you are making large investments, it is advised to use the hardware wallet which is more secure in nature. Exchange platforms can be hacked or go extinct in the twinkle of an eye; never make the mistake of leaving your coins there!
With the current trends, Bitcoin looks like it is here to stay for a long time. Some huge service providers like Amazon have declared their intentions to explore means of making cryptocurrencies one of the modes of payment for their services. While cryptocurrency could be a viable investment for you, make sure to avoid some of the mistakes highlighted above for a savvy and smooth sailing crypto journey!