Should I Invest In Bitcoin? When’s The Best Time To Buy Cryptocurrencies?
The number one question everyone asks is:
Should you Invest in Bitcoin in 2018?
or a close second along the same lines:
When's The Best Time To Buy Cryptocurrencies?
now..if only YES and NOW were all you needed to hear and know..we'd all be moon bound.
By-now everyone knows there are many factors and figures that go into formulating an accurate future of bitcoin and its financial fungibility, let alone any of the other thousands of offspring – but one can most certainly be attuned and dare say awakened to the truth towards the overall optimism and lay of the land when it comes to bitcoin and its 1-3-5-10 year future and beyond.
As bitcoin begins its now year-long sustained mainstream media adoption and coverage, everyone remembers the start of the year for Bitcoin back in January 2017 when it was hovering around $1,000 for the first time in years. Only to see it rise quickly to $1,300 when the anticipation of the Winklevoss twins EFT proposal was in the air – in which it failed and the price dramatically dropped to $950~ range – and why do we tell you this?
Because that was the lowest Bitcoin has been ever since.
It quickly surpassed the $1000 level (head nod to those who bought back in on that bad news fud/fomo) and had no signs of slowing down as it crossed $2,000 mark by middle of May and never looked back there either. Then we saw August 2017 Bitcoin price cross the $3,000 benchmark and has since still not been lower.
We could go on and on, but the point is to draw out the fact that bitcoin has positioned itself as the pioneer of the cryptocurrency space and as a result, may people are asking questions if it’s too late to invest in bitcoin, and when is the best time to enter the market – and have been since the prices were in the few hundreds to a few thousand to now what is hovering around $8,000 price points.
Then there's whether to buy a random ICO token in hopes of it mooning to millions or buying in on top 10 or 20 coin's expected futures – but one thing that always remains constant in our humble opinion – the #buymorebitcoin hashtag keyword should be used way more often.
While we will not get into the specifics of bitcoin (BTC) and bitcoin cash (BCH) here, but bitcoin is the world's first decentralized cryptocurrency with a public accounting system known as blockchain distributed ledger technology. While you may care less about the technical aspects of things, it is important to note when investing into bitcoin you are investing into the blockchain to keep track of everything for everyone so there is no double spend or network attack. It is incentivized for everyone involved to contribute as much as they can to the network and be rewarded.
Getting Started: Why Investing In Bitcoin Will Likely be a ‘Smart Move'
Before we get started, let’s get something important out of the way first. Bitcoin is not a company or stock; it’s a virtual currency. If you still don’t quite get what Bitcoin is, there are plenty of videos online and articles on this site that can give you a clear explanation.
So, when you finally want to invest in Bitcoin, you are essentially buying a currency like the US Dollar or Japanese Yen However, there are also some specific strategies for investing in bitcoin. So what does it mean to invest in the coin?
There are several answers to this question, and it comes down to your investment strategy. Do you want to hold the coin long-term, or do you want to put money into Bitcoin-related companies such as miners? Or are you look to day trade and make money on the ups and downs of the market?
There is no shortage of investment ideas when it comes to Bitcoin, but by far the most common strategy is buying it and hoping that it increases in price. This practice is also known as hodling. If you follow this practice then you’ll need to decide for yourself when’s the best time to enter the market and be prepared to ride out the ups and downs.
Is It A Good Idea To Use Bitcoin in 2018 or Wait?
The honest answer here is “why not both”. Why not buy bitcoin today, and wait it out too. The hold on for dear life mentality of HODLING (post cryptocurrency glossary) is what seems to have the sticky power of sustaining the entire ecosystem that is bitcoin, the first ever blockchain cryptocurrency application to be truly decentralized, peer to peer and trustless.
Here are a few extra points to get you started with buying and holding bitcoins:
- You should never invest more than you are willing to lose. (derisking)
This is because Bitcoin is an especially risky investment and its price can bottom out at any moment. Also, after you buy your Bitcoins, ensure that you move them into one of
- your personal wallets (see types) and never leave them sitting on the exchange.
As keeping one’s bitcoin at the exchange is extremely risky (unless frequently trading), many investors are recommended to buy a hardware wallet to store your bitcoins and keep them offline. A hardware wallet not only completely moves your bitcoins offline in a space where hackers and other criminals cannot easily access them, but gives you the ability to protect your private keys in a non electronic way too.
People have been calling for the death of bitcoin some 300+ times, saying its a bubble or a tulip and will crash anytime. The real question when considering a real-life bitcoin investment is to think long term vs short term – and knowing everyone's specific case will vary some, but should be a big indicator as to what you are trying to get out of and eventually accomplish with a deposit into the leading digital cryptocurrency bitcoin.
Entering the Bitcoin market
A strategy to follow is to buy Bitcoins using the dollar cost averaging model. This means that you won’t place one huge order, but you’ll buy at a fixed amount each month, week, or day. This means that the average price of your investment will be spread out over your specific timeframe, and overall cost should be lower.
You can also look at combining dollar cost averaging with Bitcoin trading, which differs significantly from buying and holding on for dear life. When you’re trading bitcoin, you’re trying to buy Bitcoin at a low price and then sell those Bitcoins at a higher price later on. Being able to do this requires knowledge, luck, and practice, and is harder to do in real life than you might think.
Bitcoin trading has been taken over by ‘whales’ or large institutional investors who have large holdings of Bitcoin and other cryptocurrencies. Whales wait for newbies to enter the market and perform pumps n dumps. This leads to newbies commonly losing their initial investments due to the orchestrated efforts of these large players.
Getting started with Bitcoin Mining
If you’re committed to bitcoin investing here are a few tips that you can put into practice. Some people like to invest their money into mining bitcoin, yet this is becoming increasingly cost prohibitive with expensive fees and a lower return on investment overall.
This means that you’ll need to invest a significant amount of money into Bitcoin equipment to see only modest returns form your efforts. Also, mining is generally only worth it if you are willing to perform it on a large enough scale, preferably in an area where electricity is cheap and free from government regulation.
The cost prohibitive nature of bitcoin mining means that it’s usually better to buy Bitcoins with the same money that you’d use to buy bitcoin mining equipment.
Also, some of you may have heard of some times that will mine bitcoins on your behalf. This system is called clod mining. A cloud mining platform can fall into either one or two categories: they can either make off with your initial investment, or they are legitimate establishments but with disappointing returns. Again, in most cases, you’ll probably be better off simply buying bitcoins with the same amount of money you’d use on a bitcoin mining site.
Investing in a Bitcoin company
Besides cloud mining platforms, there are also some sites that promise to grow your existing stack of bitcoin. These sites are called high yield investment programs or HYIPs for short. These sites have been around for a while and all have something in common: the promise quick, guaranteed returns, which to any thinking person, will know that this is impossible. In fact, most HYIPs are nothing more than poorly-disguised Ponzi schemes, but they still manage to make off with a fair amount of money before they are either closed down or disappear without warning.
HYIPs will promise guaranteed return along with a bonus incentive for introducing new users to the platform. This incentive will only last for a few months before the platform will stop paying out, as the money was really coming from new users to the platform, and not through their automated investment or trading software – or anything they propose to their users as a way that they can guarantee such high returns.
In short, any site that promises you guaranteed profits is trying to scam you, as no one can promise guaranteed profits of any site. So what’s the best way of avoiding these scams? Don’t be foolish, don’t be greedy, and don’t believe anyone who promises you easy money. This principal applies as much to other areas of business as it does cryptocurrency, yet cryptocurrencies are particularly vulnerable to this kind of con due to high amounts of fear and greed.
When is the best time to invest in Bitcoin?
Now that you have a clear of idea of the kinds of strategies that are available to you, including ones to stay away from (HYIPs), the next question to consider is when to enter the market, which can be answered easily: buy Bitcoin when it’s priced lower than its average historical performance. Many sites offer a “moving average” chart that will show the perfect entry and exit points to the market.
Although buying below the average can work well if you’re able to time the market, nobody knows what crypto or bitcoin will do tomorrow, or even in the next hour. Unlike stocks, bonds, or buying fiat, cryptocurrencies are highly volatile, much more so than traditional investments. This can be both good and bad: on one hand, you can make some quick and easy profits on a good day, but you could also lose your entire investment in the next.
So, buy the dip, but don’t expect your predictions will be correct all the time. This is why many traders use tools like limit and sell orders to hedge against the very real risk that their predictions might be off and lose a significant amount of money.