digital currency investment

, , 22 comments


While Bitcoin investing can be intimidating for those just getting their feet wet, there are several tips that newcomers can use to maximize their chances of success.
By following the top five tips listed below, investors can boost their chances of meeting their goals.
1) Do Your Homework
First and foremost, investors just getting started with Bitcoin need to do their homework.
"The more you understand the better off will be," stated Pawel Kuskowski, CEO & co-founder of Coinfirm, a blockchain and regulatory technology firm.

He emphasized that "bitcoin offers a unique and rare opportunity, but needs to be treated accordingly." 
As a result, more than one expert encouraged newcomers to dive into Bitcoin's underlying technology.
"If you have any technical bent whatsoever, take 10 minutes to leaf through the original 2008 Satoshi white paper," stated crypto fund manager Jacob Eliosoff. 
"It's only 8 pages, legible and an inspiring work of genius!" 
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Lucas Geiger, founder and CEO of Wireline, offered similar guidance, stating that investors should be sure to have a strong grasp of the blockchain, the distributed ledger system that underlies all digital currencies.
"This may seem obvious, but I think the first thing is take time to understand the blockchain," said Geiger"I say this strongly, because few people will do this." 
"If you don't have a high level understanding of how a blockchain stores secure data (such as coins), then you are investing in the equivalent of tulip bulbs," he added. 
Since learning about Bitcoin can take time, newer investors might benefit significantly from working with a mentor, emphasized Adam Nestler, CEO of Kudos, a decentralized protocol for building a fair service economy. 
"Find a trusted person or resource that you can engage with to ask questions in order to understand the nuances of your investment in a safe environment," he said. 
Be careful when investing in digital currencies. Shutterstock
2) Proceed With Caution
Risk is inherent to investment, and investors should keep in mind that digital currency is in a very early stage of development when compared to similar asset markets like the stock or bond markets.
"This is still an extremely high-risk space," emphasized Eliosoff. "Don't invest money you can't afford to lose!" 
While these considerations can be quite helpful, some experts provided more specific guidance.
"Start small, and invest a small portion of your capital," suggested Marshall Swatt, a serial entrepreneur. 
Tim Enneking, managing director of Crypto Asset Management, offered tips for entering positions.
"Don’t chase Bitcoin prices. Decide on a entry point and stick with it," he said. "With Bitcoin, you’re almost always right in terms of foreseeable price action – it’s your timing that might be off. So, be patient, and let the Bitcoin price come to you." 
Once Bitcoin has reached the right price, Enneking suggested that investors refrain from buying their Bitcoin all at once. Instead, they should "stage in and stage out," meaning they should invest a little at a time, wait for a bit, and then invest some more.
Effective diversification can prove highly beneficial. Shutterstock
3) Diversify Effectively
Over the last several years, Bitcoin has produced some very impressive gains, and media outlets have developed a steady stream of stories about "Bitcoin millionaires."
While these stories might tempt an investor to put all their money in Bitcoin, keep in mind that no investment professional would advise an individual to put all their eggs in one basket.
When creating a diversified portfolio, investors could consider altcoins, more traditional assets such as stocks and bonds, or both.
The basic idea behind diversification is creating a portfolio where a decline in one component will correspond with an equal gain in another.
For example, let's say an investor has a simple portfolio, consisting of equal amounts of Bitcoin, Ether, Litecoin, Ripple and Bitcoin Cash.
If one digital currency falls 10%, then ideally, another digital asset will rise by the same amount.
Oliver Isaacs, a tech entrepreneur, emphasized that if an investor set up a diversified crypto portfolio and Bitcoin's price suddenly fell to $0, they would still be able to invest because their altcoins would still have value.
"Hedge Against Volatility and don’t put all of your eggs in one basket," he stated. "Much like investing in  the stock market or FX, you should diversify your funds as a risk management technique." 
When picking out altcoins to incorporate into portfolios, investors need to be careful, emphasized Robin Bloor, senior VP of strategy & communications for software provider Algebraix Data.
"There are a vast number of other active cryptocurrencies (hundreds)," he noted. "Remember that most of them can be thought of as start-ups and most start-ups fail.
As a result, conducting thorough due diligence is crucial, stressed Bloor.
"You need to research the business model in detail for any coin or token you are considering and then carry out due diligence - in terms of current funding, pedigree of the leadership team, original technology, marketing plans, product plans, product maturity and so on," he stated.
Wallets can be a very safe place to hold your digital tokens. Shutterstock
4) Keep Your Coins In Wallets
While exchanges are a great place to purchase digital currencies, they may not be the best place to hold such assets.
"Don't store coins on an exchange," emphasized Eliosoff. "In Bitcoin's short history many, many exchanges have gotten hacked," he noted. 
"It's fine to buy on an exchange like  Coinbase, but then move your coins into an online wallet like https://blockchain.info/wallet/, a mobile wallet like Jaxx or Coinomi, or create a paper wallet - all free and pretty easy," said Eliosoff. 
Investors can take further action to manage risk by using both hot wallets (online) and cold wallets (offline), emphasized Matthew Unger, founder and CEO of iComply Investor Services inc.
"Just like you keep some cash in your wallet, some in your bank account and perhaps the really valuable stuff in a safe, you need to manage digital currencies in the same way," he stated.
Volatility is very common in the crypto markets. Shutterstock
5) Prepare For Volatility
The digital currency markets are notoriously volatile, and there are several strategies that investors can use to manage the inevitable price fluctuations.
One strategy, diversification, is covered earlier in the article.
Another strategy, buy and hold, has been advocated by a great many financial gurus, including legendary investor Warren Buffett.
"Buy-&-forget is the right strategy for most investors," stated Eliosoff.
"Resist the temptation to make short-term bets, to 'sell at the top', to get in at the cheapest price," he said. "Most people who try this stuff underperform simple buy-&-hold." 
Gavin Yeung, founder and CEO of digital asset management firm Cryptomover, offered a similar point of view.
"We at Cryptomover believes that a passive investment style will outperform active strategies in the long term," he stated. "Not only is passive investing inexpensive and simple, it also lowers trading fees leading to much lower operating expenses."
Disclosure: I own some Bitcoin and Ether.

22 comments:

  1. This is a great inspiring article. I am pretty much pleased with your good work. You put really very helpful information.
    https://dissertationwritinghelp.uk/dissertation-proposal-help/

    ReplyDelete
  2. ManoMano voucher code are possibly the best way to save money shopping while staying at home. Their Home Improvement products are one of the finest. So, while shopping remember to check on Activecodes.co.uk before checkout, you will find great ManoMano discount code that will help you save your money. We have a great list of ManoMano voucher code on our merchant page, So If one of our ManoMano code is not eligible on your order surely the other one will or you can also avail our pre-activated manomano voucher code UK deals & offers to save much more without redeeming a code.

    ReplyDelete
  3. Fortune Jackets care for your fashion requirements. We uphold the premium quality jackets. Visit site Thanks.

    Glee Cheerios Letterman Jacket

    ReplyDelete
  4. Fortune Jackets care for your fashion requirements. We uphold the premium quality jackets. Visit site Thanks.

    Diesel Red & White W-cash Wool Jacket

    ReplyDelete
  5. Very interesting blog. Alot of blogs I see these days don't really provide anything that I'm interested in https://dissertationsky.co.uk/marketing-dissertation-help, but I'm most definitely interested in this one. Just thought that I would post and let you know.

    ReplyDelete
  6. Thanks for sharing this information to increase our knowledge. Looking forward for more on your site. Here is such an amazing Ashkha Fashion check this out now you can get this with special discount perfectgadgets24 and with free shipping as well

    ReplyDelete
  7. If you Learn how to set up and manage your Email account. AT&T has you covered with AT&T Mail support, So here is bellsouth email support number for your help.

    Bellsouth Email
    Bellsouth Email Support Number
    Bellsouth Email Support

    ReplyDelete
  8. It was a pretty useful piece of information! I'm only getting started with this, but I'm getting a lot more comfortable with it! Thank you, and keep up the fantastic work. visit this link: glass mosaic manufacturers

    ReplyDelete
  9. I believe that this knowledge should be shared with everyone. You have described it so precisely that it would be amazing if you'd also us to re-share it also I didn't know that this aspect exists
    Source: toilet latch child safety toilet latch

    ReplyDelete
  10. Thanks for sharing.I found a lot of interesting information here. A really good post, very thankful and hopeful that you will write many more posts like this one.
    website design services

    ReplyDelete
  11. I believe that this knowledge should be shared with everyone. You have described it so precisely that it would be amazing if you'd also us to re-share it also I didn't know that this aspect exists
    Source: Digital marketing services near me

    ReplyDelete
  12. QuickBooks Connection Diagnostic Tool is a useful tool that assists QuickBooks desktop users in resolving a variety of issues caused by network and company file corruption. This powerful tool detects and resolves connection issues between QuickBooks, company files, and the database manager.

    QuickBooks Connection Diagnostic Tool

    ReplyDelete
  13. This is a really useful piece of knowledge. I appreciate you sharing this mind-blowing knowledge with us. Please keep us updated in this manner.
    Source: ladies hair salon near me

    ReplyDelete
  14. Get a minimum of 20% off selected girl clothes orders for a limited time only · Boden discount code.. boden discount code

    ReplyDelete
  15. Cryptocurrency, often known as crypto-currency or crypto, is any type of digital or virtual currency that uses encryption to safeguard transactions. Cryptocurrencies operate without a central issuing or regulating authority, instead relying on a decentralised system to track transactions and create new units.
    O2hair

    ReplyDelete
  16. Thank you for providing this information. This website has a lot of useful Children's Entertainment Center West Hempstead. A fantastic piece, and I am grateful and hopeful that you will write many more like it.

    ReplyDelete
  17. Health is wealth! You will find the products that will suit your needs. Today is the day for healthy life changes!

    Guardian Multi-Pack

    ReplyDelete


  18. Very interesting blog. A lot of blogs I see these days don't really provide anything that I'm interested in, but I'm most definitely interested in Yellowstone Beth Dutton Wool Coat this one. Just thought that I would post and let you know.

    ReplyDelete
  19. Very fascinating story, it is difficult to find interesting and relevant content among blogs now. That is why I will definitely share your blog
    Site : Synergy Kit

    ReplyDelete
  20. Articlesplanets.com is one of the most popular & trusted articles hub for Tech professionals. we provide a single source of technology, information and Healthcare Services in our Society.
    Articlesplanets brings you latest Gadgets, Mobiles, Tips and tricks, Software’s, Tech news related topics.

    ReplyDelete
  21. I received a very well-written paper with obvious research done by the writer. I can only say that I am so happy and highly recommend Dissertation help

    ReplyDelete
  22. After reading this post, I applaud the author's efforts Enrichment Stem Program Kids am happy for the opportunity to learn about this interesting topic.

    ReplyDelete