3 Mistakes in Bitcoin Investing and How to Avoid Them

Cryptocurrency is everywhere. The buzz is undeniable, and while there was resistance in the past one thing is for sure.

It’s not going anywhere!

Bitcoin leads the pack among the many modern-day competitors, and you like many may want into the game. That’s great. But there is good reason to do so with caution.

With so many people wanting to take advantage of and exploit newbies, mistakes in Bitcoin investing are far too common. So in order to push things in your favor, we have put together some of the most important tips to make sure that your Bitcoin investment strategy is a winning one.

Not Taking Your Security Seriously

While there are many external investment risks and rewards when getting involved in cryptocurrency, the most demoralizing are those that are self-inflicted.

Losing your investment through not having good online security or taking care of your passwords are the most common ways that this can happen. To illustrate, there are approximately a shocking 140 billion Bitcoins lost forever due to people losing their passwords!

As there is no middle man between you and whoever you choose to do transactions with, there is no one to run to if you ever have an issue for any of these reasons.

To combat it get into good habits, like not sharing your keys with anyone and avoiding leaving your currency in one exchange for too long, in case it gets hacked. Lastly, invest in a secure wallet preferably an offline one, and keep track of your access keys.

This link also highlights some more resources that can help you get your Bitcoin securely.

Buying High and Selling Low

Thinking with your head and not with your emotions is a difficult task when dealing with fluctuating markets. But if you get it right, it can save you a lot of money, and regret.

When researching what to buy, a classic among the mistakes in Bitcoin investing is buying when the prices are shooting up, then pulling the trigger the first time it looks like you are about to lose big on your investment.

The nature of the markets is ups and downs. So knowing this, you should be wise about not only when to sell, but also when to buy.

One tactic that can also offset this is using dollar-cost averaging. This way you avoid buying your Bitcoin at what could be the highest price, essentially futureproofing your investment.

Thinking That Only Bitcoin Is the Answer

The first rule of investment is to diversify.

The reasons for doing so are clear. Having all of your eggs in one basket can lead to some disastrous results, and as we have seen just over the last 20 years, no form of investment is safe from sharp drops and eventual losses.

Yet one of the biggest mistakes in Bitcoin investing is just that. Perhaps new investors want to join the perceived party being had in “Cryptoville”. But pumping your savings into one thing is not a wise Bitcoin investment strategy.

Instead, make Bitcoin a part of your investment strategy along with traditional investments, such as shares, mutual funds, etc. In addition, investing in other cryptocurrencies is another safe tactic to always keep your head above water.

Will You Avoid Mistakes in Bitcoin Investing?

Deciding to step off into new territory can be an exciting path to be on, and getting involved in cryptocurrency is no different.

But before you begin to see those big Bitcoin investment profits, often it is natural for many to fall foul of mistakes in Bitcoin investing. We hope that our article has been able to push you in the right direction so that those heady days are not too far into the future for you.

If you liked this article then check out the other great financial advice found on our site!