2013 saw a boom in Bitcoin, reaching $1 billion in value before crashing down to just $200 million. The currency regained ground, increasing by more than 100% in 2014. 2015 was another significant year for Bitcoin, with the coin reaching its highest dollar value yet of over $1000. Platforms like the Bitcoin News Trader make the best utilization of artificial intelligence and perfect trading strategies to help newbie traders in their trading journey. In 2021, bitcoin touched a few significant milestones, such as $65000 and $69000; some people even predict that bitcoin will touch $100k by the end of 2022.
In the world of bitcoin and cryptocurrency trading and investing, it’s not uncommon to see people making mistakes detrimental to their investment strategy or even their finances. Here are five critical mistakes every bitcoin investor should avoid if they want to protect themselves from unnecessary risk.
Key things you should know before investing in bitcoin:
A public bitcoin address is an address you display to the world; therefore, you should never share your private key with anyone or post it online. Of course, you can give out your public address so that people can send you coins, but remember, this entire process should be done with utmost caution when it comes to Bitcoin and cryptocurrency investments because every investor needs to know how to protect themselves from hackers and other malicious groups online.
Avoid these five mistakes while investing in bitcoin:
1. Not having a goal
You may be able to harness the power of bitcoin and cryptocurrency trading, but if you don’t know what you want to achieve, likely, you will never get there. Once you do your research and find out what interests you the most, figure out how to achieve this goal. Why would you want to do this when a new technology can help transform your life for the better? Goals are the basis for all further decisions someone makes, so make sure you have something worth working towards before you invest any time into bitcoin trading or investing.
2. Thinking short term:
Suppose you want to make a severe investment in bitcoin. In that case, you should avoid looking for short-term profit, and if your very purpose with bitcoin is to avail capital gains in a short cycle, then an appropriate trading strategy will help you exceedingly; you must decide the trading strategy according to your risk tolerance. Usually, the people who are buying and investing in bitcoin are the ones who are thinking of cashing out a little later down the line, but it’s not that simple with cryptocurrency. It’s all about understanding how bitcoin works and understanding its technology before you can decide whether or not it’s something that interests you as an investor.
3. Directly jumping to trading without any knowhow:
Bitcoin trading is not a piece of cake; like any other commodity, equity, or stock, bitcoin trading requires sheer skills, knowledge, and analysis; you cannot just rely upon your luck and sit back and relax. Jumping into trading without dedicated knowledge about bitcoin can lead to massive losses. Before trading bitcoin, you must know what trading strategies exist, what causes price movement in the bitcoin network, and how to take a position in the bitcoin market.
4. Letting emotion triumph over reason:
The sudden spike in price made some investors rich overnight, and many people witnessed many millionaires turning their backs on traditional banking methods to embrace this new digital currency. However, if you cannot make your mind up or are unsure, it is probably best to hold off investing in bitcoin until you research more thoroughly.
5. Trading on a platform that is not secure
Investment and trading platforms are the cruces of bitcoin transactions. These platforms provide an easy and convenient way to carry out trading, but the problem is that only a few of these platforms are secure. You need one malicious or careless employee to mess up, and your coins are gone, so make sure you choose a platform that offers the highest security features possible.
The volatile nature of cryptocurrencies can make everything seem like a lot of hard work and can be off-putting for those who are not prepared for initial setbacks as there is no instant gratification. However, undeniably, there is massive room for profitability in the cryptocurrency market. Still, before making any decision, an investor should be familiar with what they need to avoid while making their first move in the bitcoin investment journey.
Bitcoin is a great investment opportunity if you’re looking for a new alternative with a high potential return. However, you should avoid some mistakes to make your investment strategy successful.