It has been more than a decade since Bitcoin hit the crypto market and became a huge thing in the technology, establishing brand new standards in global finances. Knowing the fact that they are still controversial is just a small proof of their influence, not only on Bitcoin but also every other cryptocurrency that came out in the following years.
Today, in 2020, Bitcoins are still the “safe haven” of the crypto market, but after the coronavirus outbreak and unpredictable rates, people decided to give a try to the other currencies available. Every day, some government decides to legalize these currencies and let the people mine and trade them, and the most recent example, according to techtimes.com, is Russia, after the Russian authorities decided to implement the new laws and use them freely.
But, you can’t decide to just invest in this market. You need to research it and have some basic knowledge of what you are intending to do. The more things you know, then you will be able to join the huge community and even make a profit from your investments in the end. These are some of the things you need to know before you invest in Bitcoins this year:
1. Some basic things
Almost every cryptocurrency isn’t managed by a central bank or public company. Some economies tried to adapt lesser-known crypto money and include them in the standardized payment methods in the country, but that doesn’t go that easy as it sounds at the beginning. When it comes to Bitcoins, you need to know that they were invented by a person who is using the pseudonym Satoshi Nakamoto. He or she never came out publicly and no one knows the true identity behind this name.
People love them, and since they were the first crypto coins on the Internet, many of them think they are still the best. But, their existence is not a guarantee that they are not risky. Every cryptocurrency is risky and you can’t get into that with your head in the clouds. Follow the charts and see how the value was changed through the years, so you can decide by yourself is it worth investing into.
2. There will always be some risk
Since this money exists only in cyberspace, you can’t be sure you will always get them. You can try investing some smaller amount that won’t affect your budget very much, so you can see how it goes. When it comes to Bitcoin, in December 2017 it hit a huge rate of $19,800, but as you can remember, in the first months of the corona crisis, at some point it was worth less than $7,000. The year 2017 was great for this currency, but even though the December price was pretty high, back in May the same year, this currency was worth only $1,000 per one coin.
Crypto experts don’t think the rates will change a lot in the next months, but surely the global state of pandemic affected every field of our life, including the crypto market.
3. How will you use them?
Determine what your goal is. Maybe you want to become a big name in this field, and if that’s the case, you will need to invest a lot of fiat money, so you can support the blockchain and take a part in the maintaining of the currency. You can also just want to earn some side money when the crypto hits the right price for you. Also, it’s allowed to just be a part of the market, trade, and exchange, without any particular goal or intention. Everything is fine, but don’t try to be a part of everything. Take little steps, and see how it goes.
4. You should have a strategy
Even meal preparation and grocery shopping require some kind of strategy and financial actions should be very nicely planned, especially when you intend to take these serious steps, like cryptocurrency investments. Determine how much money you want to invest, but also what do you expect from that. Choose the right moment to start with that, and if you see that it doesn’t go as it was planned, just stop, before you lose too much money on nothing.
5. Bitcoin may fail
No matter its top place on the crypto market, Bitcoin may sadly fail and leave the investors without their savings. We don’t mention this just to scare you, but to keep in mind that, as we said, cryptocurrencies are risky, and you shouldn’t hold onto them when planning your future income. The failure of something virtual isn’t a new thing in this world. Remember, this money is not well established in the global economy, so it can’t be your safe place in the finances. And not only they can fail, but they can also vanish and disappear, which may end up losing everything you saved on your virtual accounts for years. That’s why most of the experts will suggest you withdraw the currencies on your virtual wallet and exchange or trade them for real money because if vanishing happens, your savings won’t be worth even a penny.
6. Don’t let your emotions lead your actions
When some currency hits an attractive price, you will have an urge to invest a lot of money in it, but we highly recommend not to do that. According to BitcoinEvolution, emotional investments are never a good option, so you should avoid that. Unpredictable peaks may also end in unpredictable downfalls, and that will result in losing money and getting a lot of stress about that. So, if you are sure you want to invest, you need to take this thing in mind too.
There are a lot of scenarios that may happen with the crypto market. Hopefully, the global banking system will embrace it and cryptocurrencies will become a huge part of the finances. But, if that doesn’t happen, we will always have our fiat money “to save the world”. Just follow this small guide and listen to our advice, so you won’t get in trouble on this market.