Although bitcoin may be scary for people who have just set foot in the investment field, here are some suggestions that novices can use to maximize their chances of success.
By following the formula listed below, investors can improve their chances of achieving their goals.
1. Do your homework and research.
First and foremost, investors who have just started to contact Bitcoin need to do their homework.
The ancients said, know yourself and know yourself.
Therefore, more than one expert encouraged new investors to study the technology of Bitcoin in depth.
Investing in cryptocurrencies or tokens is highly speculative and the market is basically unregulated. Anyone who considers investing should be prepared to lose all his investments.
Adam Nestler, CEO of Kudos, stressed that since it takes time to understand Bitcoin, new investors may benefit greatly from working with mentors. Kudos is a decentralized agreement aimed at establishing a fair service economy.
Find a trustworthy person or resource, do as much detailed research as possible, and understand the nuances of your investment in a safe environment.
be discreet
Risk is inherent in investment. Investors should remember that digital currency is at a very early stage of development compared with similar asset markets such as stocks or bonds.
This is still a high-risk area, so don't invest too much.
Start small, invest with a small part of your own funds, be small and broad, and don't chase the price of Bitcoin. Decide an entry point, stick to it, wait patiently, and let the price of Bitcoin come to you.
Once bitcoin reaches the right price, investors are advised not to buy bitcoin at one time. Instead, you should enter and exit in stages, which means you should invest a little at a time, wait a little, and then invest more, not all at once.
3. Diversification of investment
In the past few years, Bitcoin has generated some impressive profits, and the media has been reporting stories about "Bitcoin Millionaire".
Although these stories may tempt investors to put all their money into Bitcoin, please remember that no investment expert would advise individuals to put all their eggs in one basket.
Investors can consider more traditional assets such as counterfeit goods, stocks and bonds, or both.
The basic idea behind diversification is to create a portfolio in which the decline of one component will correspond to the same income of another component.
This way can hedge fluctuations, and it will not be particularly serious for a while.
4. Put coins in your wallet
Although the exchange is a good place to buy digital currency, it is definitely not the best place to hold such assets.
After trading bitcoin on the exchange, you must put it in a wallet, whether it is a paper wallet, a hardware wallet or an online wallet, most of them are free.
Just like you put some cash in your wallet, some in your bank account, and maybe some really valuable things in the safe, you need to manage digital currency in the same way.
Prepare for fluctuations
As we all know, the digital currency market fluctuates violently, and investors can use several strategies to manage the inevitable price fluctuation.
This paper introduces a strategy, that is, diversification strategy.
Another strategy is to buy and hold, which is advocated by many financial masters, including legendary investor Warren Buffett.
Short-term bet, don't sell at a high price, and don't buy at the cheapest. Most people who try this method do not perform as well as those who simply buy and hold.
In the long run, passive investment style will be better than active investment strategy. Passive investment is not only cheap and simple, but also can reduce transaction costs, thus greatly reducing operating costs.