So far Bitcoin has been shown to be the best investment right now in the market, with it's price skyrocketing in the past few weeks and currently at an all time high of
$43780 at the time of posting. with this we can all say that we are gradually moving into the bull run and at that, more newbies will want to invest in Bitcoin so as to also benefit and make profit from it's bull market. somany newbies who might be considering investing in Bitcoin, might not have enough knowledge on how to do so, and might be wondering if they can actually buy Bitcoin now or wait for a dip. so I've decided to write on a few things that might help them accumulate Bitcoin during this period and also how to secure their profits as well as Thier funds.
To start with, as a beginner understanding the basics of how Bitcoin works and its potential benefits, and why a lot of us Bitcoiner has chosen to put our money into Bitcoin is crucial.Beyond its technological aspects, you should consider exploring the historical context, the philosophy behind decentralization, and how Bitcoin differs from traditional currencies. Familiarizing yourself with these aspects will provide a solid foundation for your investment journey.
I will recommend you read this book,
a Bitcoin book written by one of our own member, who is contributing greatly to the Bitcoin community.
Tyke Note: The Bitcoin yearly history chapters begin on page 44 after introductory and other BTC related pages. link to Bitcoin book https://drive.google.com/file/d/1sXCe8m8c1scmtHvtuporuO1ml7h3JQD_/view?usp=sharingConsidering investing, you might be have heard about the long and short term investment. a lot of members here on Bitcointalk are mostly focused on the long term Investment, as it less risky compared to the short term investment method.
you should be able to tell which kind of investor you might become. in Bitcoin, we have the long term investors(holders) and the short term investors(Traders).
Long term investors are individuals who buy or invest in Bitcoin with the intention of holding it for an extended period. They make profits by holding onto Bitcoin for more than the year of accumulation. Long term investors face less risk and have minimal tasks. Their main focus is to keep their funds secure and keep accumulating Bitcoin by buying more. They are committed and not bothered by the fluctuation or volatility of Bitcoin prices, as their plan is to hodl for a considerable period and aim for the all-time high (ATH). This investment strategy benefits from Bitcoin's limited supply of 21 million coins, which will never be exceeded. the long term investment, requires commitment and patience, focusing on the overall growth rather than short-term price volatility.
short term investors(Traders) now come to think of it, we keep hearing a lot of persons on social medias,like YouTube telling you how they make huge profits in a little period of time from their investment. though it is sometime true, but this kind of investment or investor is more like gambling and investors I will term gamblers. short term investment comes with a whole lot of risk and someone who is not experienced might end up loosing or exposing his investment to risk. a lot of experts or legit persons who are into trading, will advice you to take precautions before going into trading as the journey is never straight forward. your gains/profits is not guaranteed no matter how good you are. on the other hand, there are some fake traders who keeps promoting short term Bitcoin investment as the right way, that's because they barely even know what trading really is.
Now, the question is, what kind of investor should I be?Many long-term investors believe in patiently waiting for the market to reach an all-time high (ATH) to gain profits from their investments. However, not everyone has the patience for such an approach, and some may explore other forms of investment for quicker returns. Choosing the type of investor you want to be depends on your understanding of two methods: long-term hodling or short-term trading. Whatever choice you make should aim to minimize the risk of losing profits or your initial investment. Don't let others pressure or confuse you into becoming an investor type you don't want. You need to make these decisions for yourself and be prepared for the associated risks.
As you can see in this image above, the journey of a long term investors can be a straight paths it all depends on how much knowledge you have in keeping your funds for a very long period of time. short term investment may give you profits in the little period, but the journey is never straight to start with. so the choice is yours.
I will advice you check out this thread by @1miau on the difference between Trade vs hodl
Trade vs. HODL - avoid traps
Do You Actually Need to Check the Market Daily?Constantly monitoring the market can be overwhelming and lead to unnecessary stress. While staying informed is crucial, daily checks might not be necessary for everyone especially a long term hodler. you have to Set realistic goals, establish a review schedule that suits your lifestyle, and make adjustments to your investment strategy as needed. this is one of the benefits of being a long-term hodler, as you are relieved from constantly being updated with the current market price. a short term investor, will have to always be on the market price chart, so a to make his profits from little rise of price in the market.
Now that being said, it time for you to accumulate your Bitcoin, but
how and what method should you use to accumulate Bitcoin?it is normally adviced to buy Bitcoin at the dip and sell at a high. The
"buy the dip" strategy in accumulating Bitcoin involves purchasing the cryptocurrency when its price experiences a temporary decline or dip. The idea is to take advantage of lower prices during market downturns, expecting that the value will rise again in the future.However, when the market doesn't undergo a significant dip, as we are experiencing now. it can pose a challenge for investors, especially newcomers and average individuals. In such situations, it becomes essential to consider other methods of Bitcoin accumulation.
DOLLAR COST AVERAGE METHODmost bitcoiners prefer this method of accumulation of Bitcoin. that's because Bitcoin investment is the only investment so far, that doesn't actually requires you using a very large or substancial Amount before you can begin your journey. Investing in Bitcoin can cater to various income levels. Regardless of your earnings or investment capacity, the Dollar-Cost Averaging (DCA) strategy is a simple and effective method. With DCA, you consistently invest a set amount, irrespective of current market conditions. This approach involves investing regularly, either weekly or monthly, which helps navigate market ups and downs smoothly.
During high-price periods, your fixed investment buys a smaller amount of Bitcoin, and during low-price periods, it buys more. This automatic adjustment avoids the challenge of timing the market perfectly. Instead of trying to predict the best entry point, DCA embraces natural market fluctuations, reducing the risk linked to making significant investments at a single time.This systematic and disciplined approach acts as a buffer against short-term market changes, bringing consistency and rationality to the investment process. DCA aligns well with a long-term perspective, letting investors accumulate Bitcoin gradually with less exposure to the unpredictable nature of price movements.
LUMP SUMwe also might have heard about the lump sum strategy. Lump sum Bitcoin investment involves investing a significant amount of money in Bitcoin all at once, as opposed to spreading it out over time. Instead of making periodic purchases, an investor using the lump sum method invests a larger sum of money in a single transaction.This method is based on the assumption that the overall value of Bitcoin will increase over time, and by investing a substantial amount upfront, the investor aims to benefit from potential long-term price appreciation. The lump sum approach is often associated with a "buy and hold" strategy, where the investor holds onto the investment for an extended period.
with all these explained, you might now be able to make the decision for yourself on which method of investment and what time each of them best play. the DCA method, still suits as the best method of accumulating Bitcoin because you don't have to bother yourself of the market fluctuations. you will consistently purchase your Bitcoins at a particular time interval, using the same amount of funds that you have set for accumulating.
You might have some few questions running through your mind, as you are gradually understanding how you can begin accumulating bitcoin. most times, newbies experience two kinds of fear when it comes to Bitcoin accumulation and that's
the FOMO (Fear of Missing Out and THE FUD (Fear, Uncertainty, Doubt)The crypto market can be highly dynamic, leading to
FOMO. In my early days with Bitcoin, I was eager to buy more quickly because I saw my friends making profits, and I wanted to jump in as soon as possible. However, rushing into investments can expose you to the risk of losing money. Before diving into any investment, it's crucial to thoroughly understand the pros and cons. To avoid FOMO, stay informed through reliable sources, create a clear investment plan, and resist impulsive decisions. Such impulsive choices may lead to regret over your initial investment.
FUD (Fear, Uncertainty, Doubt) Fear-driven decisions can be as a result of wrong decision making, especially in Bitcoin investment. When individuals or organizations succumb to fear, uncertainty, or doubt, they may make impulsive choices that are not based on a solid understanding of the situation.it's important to avoid emotional responses to market fluctuations. Bitcoin price can be volatile, and reacting solely based on fear can lead to suboptimal outcomes. Instead, maintaining a level-headed approach and making decisions grounded in data and analysis can contribute to more informed and rational choices. to face this fear you might want to carry out some research to enable you make the right decision that will align with your long term goal.
To sum it all up, as an average Joe, you should be kin with some of the best investment strategies before jumping into investing in Bitcoin. the market is volatile so be sure that you are ready to face it's volatility. lastly, you should also make sure to keep up with the lastest security update on how to keep your funds safe as it's most crucial to avoid being a victim of hack or fruad. I'm sure you will be able to start your journey as a Bitcoin investor with these few points I've explained.
