The bitcoin market grew over 1,000% in the past year alone. People who scratched their heads at the concept of cryptocurrency around the world are now lining up to buy in. But not everyone is privy to all of the bitcoin secrets.
For example, did you know that Bitcoin isn’t the only cryptocurrency around? Other coins like Ethereum and Litecoin have also seen exponential growth in the past year. There are dozens of other alternative coins too, like Potcoin, Dogecoin, and Trumpcoin.
If you’re new to the cryptocurrency market and looking to dip your toes in, you should get to know the ins and outs before you invest. Here are 5 of the top bitcoin secrets that the pros of the cryptocurrency world already know.
1. Research Is Important
The better you understand how cryptocurrency works, the better equipped you’ll be to make a smart investment. If you’ve never read about blockchains or how mining works, check out bitcoin’s own easy to read guide. Learning about how bitcoin is generated will help you to understand the value of blockchain technology.
Once you begin to dive in, you may also get to see how volatile the market can be. When the first bitcoins were released, there was a lot of erratic movement in the value of bitcoin. But over time, as more people have come to rely on it, value has increased.
Like any market, you are subject to forces beyond your control. If everyone else sold all of their bitcoin tomorrow and failed to call you, it might not be worth very much. Don’t invest more than you can handle losing.
If you have friends and colleagues who have already invested in bitcoin, ask if they can help you to understand what bitcoin is all about. Not all of the bitcoin secrets are hidden. In fact, information about blockchain is easily accessible but without someone to help you understand it, it may as well be hidden.
2. Be Cautious
As stated above, investing in cryptocurrency is a speculative investment. Unless you’re in a market to begin using it to buy and sell products, buying in will then entail a whole lot of waiting around. Despite the positive trends in cryptocurrency, it could all fall apart tomorrow.
Start with a small investment, as you would with any new stock or trend. See how your money grows and if it seems worthwhile, invest a little more.
Waiting for a spike, up or down, will keep you on edge. Decide when you want to get involved and enter at that price point. Invest in phases and continue to be careful.
Prices can fluctuate wildly from week to week, so be patient when you see a spike. You may think this trend will continue unrelentingly. But when bitcoin hit $20,000, it then tapered off down to $15,000 for a while.
The same thing happened to other coins and you need to understand this might continue for a while.
3. Diversify
While stories continue to circulate about “Bitcoin millionaires”, don’t let these rare cases send you running to invest everything you have. Never put all of your investments into one market. Having a little money spread around is always the safest bet.
Just because a few people became millionaires by being at the right time and the right place doesn’t mean you’re missing out.
Consider all of the altcoins on the market when diversifying your portfolio. Some coins, which are currently pennies on the dollar, have jumped from one cent to one dollar in a matter of days. This kind of growth won’t continue forever, but it could also be a nice surprise to find your hundreds have suddenly become thousands overnight.
Protect yourself from market volatility by finding other coins to invest in. The market remains relatively balanced. Usually, if one currency drops by 10%, another will rise about that amount to even it out.
When you’re investing in altcoins, you’re essentially investing in startups. Treat your investments kindly and let them grow naturally.
4. Keep Your Coins Secure
In Bitcoin’s short history, there have been a few hacks. There are even a few million in bitcoin out there that are unclaimed because owners forgot their passwords. There’s no place, digital or physical, that’s immune to being broken into.
Most exchanges take efforts to ensure that their networks are secure, but hacks are always possible. Take some time to learn more about bitcoin safes and bitcoin wallets that can keep your assets safe.
Get to know the difference between hot wallets and cold wallets. Your hot wallet is more like the cash you keep around in your pocket. Your cold wallet is a little more like a savings account.
Once you’ve purchased on the exchange, if you’re not going to move your bitcoins soon, then put your funds into a wallet.
5. Get Comfortable With The Ups and Downs
One of the biggest open bitcoin secrets is that there’s a whole lot of volatility possible in bitcoin markets. There’s little stability week to week, let alone hour to hour.
After you buy it, forget about it. Don’t keep watching the markets fluctuate, because you’ll drive yourself crazy. Don’t make short-term guesses to try to sell it at the maximum price.
Get in or get out, but don’t spend your days and nights watching a line dipping and climbing.
Bitcoin Secrets Aren’t Meant To Be Kept
While you may love the feeling of having that privileged information about bitcoin before anyone else does, don’t keep it all to yourself.
Buying and trading is much more fun when you get friends, relatives, and coworkers involved. You can groan together when the price drops and get a celebratory beer when it spikes.
If you’re looking for more secrets to buying and trading bitcoin, contact us to get all of the news and information about cryptocurrency as it happens.