Are you ready to withdraw your life savings and put everything in cryptocurrencies? You may be feeling more excited than ever about growing your wealth, especially with all the stories about people making a fortune by investing in Bitcoin and other digital assets. But can you really afford to go all in? While you may hear more people talking about making huge profits, there are also those who have lost a ton of money in the cryptocurrency market. So, before wasting all your life savings, you should equip yourself with the right information on how to invest in cryptocurrency without damaging your financial health.
In January 2017, Bitcoin’s price was sitting at around $1000. In December 2017, the price reached $19,000. Throughout the year, Bitcoin’s price enjoyed an upward trajectory, prompting more and more people to get into cryptocurrency investing. The incredible rise in the value of cryptocurrencies has also garnered the attention of mainstream media. This is precisely the reason why many people claim that investing in the crypto market is the quickest way to build wealth.
As of July 2018, however, Bitcoin’s prize is only around $6000. Can you imagine what would have happened if you used all your money to buy Bitcoin last December? There is a reason why cryptocurrency is considered a speculative asset. The volatile nature of the market proves dangerous especially for those who think that the price will always go up. Without furthering your knowledge about cryptocurrencies in general, you will inevitably make bad trading decisions.
It is never wise to put all your money into a speculative asset. There is nothing wrong if you want to trade Bitcoin daily. But you should do so with comprehensive research. Otherwise, you might allow your emotions to take over. Without any form of technical analysis, it proves difficult to make good trades. One solution is to use a trading platform like Bitcoin Loophole which automates the trading process in uses predictive analysis to gauge the market before making trades.
You should also understand that cryptocurrency trading isn’t all about buying and selling digital assets. It’s also about keeping them safe. As a wise investor, you should protect your assets by using a digital wallet. This is where you can store your digital coins until you decide to trade them. If possible, get yourself an offline wallet. It’s a far safer option than an online wallet, so the upfront cost is definitely justified.
Finally, developing healthy trading habits is also essential. Many investors do not have a keen understanding of how cryptocurrencies work. You do not have to study the technicality of blockchain itself, but at least spend time educating yourself about the cryptocurrency market in the different factors that influence price. Keeping up with the news also allows you to prepare for price fluctuations.
No matter how tempting it is to put all your money into the crypto market, just say no. Decide how much money you are willing to lose without compromising your ability to pay for everyday essentials. Investing in cryptocurrencies presents a great opportunity to increase your wealth, but the risks are real as well. It’s better to make smaller gains then lose everything before you realize it.