How to Cautiously and Wisely Invest in Bitcoin

3 August 2021
 Categories: Finance & Money, Blog

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The value of Bitcoin has swung wildly in the past and has produced many millionaires, and it is becoming an increasingly more popular investment choice. However, if you are considering this option, here is some Bitcoin investment guidance to consider. 

1. Do Not Invest Too Much in Bitcoin

Because Bitcoin has not been around for a long time as an investment, it might be more difficult to predict how valuable it will be in the long term. This depends on whether it is ultimately adopted as a currency and how it is regulated. However, Bitcoin can be a great way to diversify your investment portfolio after you receive Bitcoin investment guidance. However, Bitcoin is not likely to go away due to the extent to where it is going mainstream and is being purchased by institutional investors. 

2. Consider Bitcoin Over Other Cryptocurrencies

There are many cryptocurrencies to choose from. However, if you choose an established cryptocurrency such as Bitcoin, you may find it to be more liquid because you will have an easier time finding a buyer. There will also be more established options for trading in Bitcoin.

3. Purchase Bitcoin if You're Concerned with Inflation

Because bonds are no longer keeping up with inflation, Bitcoin might be a better option to hedge against inflation. While cryptocurrencies are volatile, they are inflation-protected because it is hard to create new Bitcoins.

4. Understand the Security Risks of Non-Custodial Wallets

Rather than having a financial institution handle your cryptocurrencies, you can choose to place them in a non-custodial wallet. This will give you more privacy and control. However, you will need to know about the security risks of owning a non-custodial wallet such as the fact that you cannot recover your password.

5. Don't Try to Buy at a Specific Time

Investing in a cryptocurrency when you expect the value to increase can be a bad strategy because you might never know when Bitcoin might dip. A better option is to invest small amounts at regular intervals to minimize your risk through dollar-cost averaging tactics.

There are several places you can purchase Bitcoin with some methods being easier than others. You can use a stock trading app to invest in crypto at a much lower cost than using a crypto exchange for example. However, with the right investment guidance, you'll be able to fully take advantage of Bitcoin. To learn more, contact financial guidance services.