When it comes to investing, there is a lot of talk about cryptocurrency. Bitcoin in particular is one of the most popular topics within the realm of cryptocurrency. But before you can worry about how to buy Bitcoin, there are a few essentials that everyone should know.
Being safe and smart is the key to effectively investing in crypto. While you may ride the wave with everyone else, you put yourself in position to lose more than others if you are not properly informed. So, here are five essentials that anyone thinking about buying crypto should know.
- Your Wallet Is Vital
Before you can even worry about which cryptocurrency to buy, you have to have a place to store it. How heavily you invest can dictate which storage method you use. There are two ways to keep your wallet: hot and cold.
For lighter investors, a hot wallet will do just fine. Hot wallets are connected to the Internet, typically through an exchange. If you aren’t pouring your life’s savings into crypto, then you can probably comfortably use this method.
But for heavy investors, it may be better to get a cold storage option. These are separate USB drives that do not stay connected to the Internet. They reduce the risk of being hacked and having your virtual coins stolen.
- Avoid “Take-Off” Points
Bitcoin is as versatile as it gets. It has had huge rises and steep falls. But just like investing in a stock, it is about getting in at the right time. That is part of the dance when it comes to investing in cryptocurrency and it is a tough one to master.
You might have a friend who swears that bitcoin is about to have a huge bump, telling you that you should buy it right now. But timing is everything in investing and that is never more true than with cryptocurrency. Try not to get in at the take-off points when prices are at their highest because there is typically only one place to go: down.
- Find a Reliable Purchase Option
Part of successfully investing in bitcoin or another cryptocurrency is about finding a reliable place to buy, sell, and trade. There are plenty of exchanges out there but not all of them are trustworthy so it takes a little bit of research.
The key is to find a reputable exchange that has a good history when it comes to security measures. The last thing you want is to sign up for an exchange only to have it hacked and all of your funds to disappear. Yes, this does happen, and it can be avoided. Be smart about which purchase option that you go with because it can come back to bite you in the end if you are not careful.
- Think Long-Term
If there is one thing above all others that you should do, it is invest and then stop looking. The history of bitcoin in particular has been a roller coaster. Incredible highs followed by horrifying crashes. That is the nature of bitcoin.
But investing should be a long-term strategy. Over time, bitcoin has historically become more valuable. It just takes a few interesting rises and falls along the way. You can save yourself a lot of heartache by simply making your investments and not looking for weeks or even months. Crypto is a long-term investment and the ones riding the wave are more likely going to lose money if they make short-term plays on it.
- Keep Bitcoin, Do What You Want with the Rest
Bitcoin is not the only game in town. When you learn how to buy Bitcoin, know that it is a long play. There are plenty of other cryptocurrencies out there to invest in. But no matter what you do, keep your bitcoin. Bitcoin has the highest credibility and investment potential of any of the cryptocurrencies out there.
You can buy, sell, and trade the others but bitcoin is the one to hold onto it. Whatever you end up buying in for, make sure that you keep at least half of it for the long-term. That will be the reason why your wallet becomes valuable over a long period of time.
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