The Best Advice for New Investors to Bitcoin

by Andrew McGuinness     Jun 15, 2018

Many people might think that as soon as they invest in a cryptocurrency as successful as bitcoin has become, their job is done. They assume their investment will grow to be profitable over time, will remain as successful as it has been lately, and all they have to do as investors is wait until this happens.

Even though some unlikely bitcoin success stories have proven that this is possible and may happen to you, the chances are slim to none. If you are a new investor to bitcoin and would like to really make the most of your investment rather than waiting for a handout, here are some words of advice:

1. A little research goes a long way

With any investment, a bit of research goes a long way. You should learn the ins and outs of bitcoin in order to understand where your investment is going, whether you would like to continue your investment with cryptocurrency, and in order to develop a time frame for how long your investment with bitcoin should last.

Knowledge you should be honing in on as a new investor includes learning about the blockchain system that will be storing your data and digital currency. It is understandable that not everyone has enough time or energy to read up on cryptocurrency. For this reason, there is a large array of podcasts, blogs, and tutorials concerning cryptocurrency made with beginners in mind.

2. Be prudent

First and foremost, what should be closely considered is just how recently cryptocurrencies were first developed and first entered the market. It was in 2009 that bitcoin was created, only 9 years ago. Bitcoin coming out marked the first sign of cryptocurrencies whatsoever on this planet.

Cryptocurrency is still within its initial phases, and cannot be considered a stable currency just yet. For this reason, a wise investor would only put money on the line that they are willing and able to lose. If you are in any way counting on the capital you are investing, if you require this money in the near or distant future, an investment in cryptocurrency is not for you.

Because this is a risky investment with not much of a stable history, it is advised to begin with a fairly minimal investment and build up from that. Do not try your luck by going ‘all in’ unless you are completely capable of handling the loss of your capital.

3. Diversification done right

Honestly, bitcoin is the only cryptocurrency that has received very much attention in the news and on the internet. It is the only cryptocurrency that even the general public must have heard about by now. And, without a doubt, it is the most popular and expensive digital currency in the market. This does not mean, however, that it is the only coin worth investing in. Any successful investor knows putting all of your eggs in one basket is never the wisest decision. So why do this with cryptocurrencies?

4. Cryptocurrency wallets

Cryptocurrency wallets exist for a reason. If you are storing your coins on an exchange rather than a cryptocurrency wallet, you are making a big mistake. Exchange platforms are much larger targets for hacking than any personal crypto wallet would be. For this reason, keep your coins secure and safe from harm by using a hot (online) or cold (offline) wallet. Blockchain offers a digital wallet, Jaxx and Coinomi offer mobile wallets, and there are countless other wallets that you will be able to find upon doing a very limited amount of research.

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