If you are like many other people, you may have shrugged off the thought of Bitcoin investments initially. After all, it may have been something that you were not familiar with and that sounded unreal. However, Bitcoin has become so commonplace and mainstream that it is difficult go a day without hearing about it from several different sources. Bitcoin investing has turned many people into very wealthy individuals, and some are millionaires several times over because they had the foresight to make a modest investment a few years ago. Now that you have decided that you are ready to make a killing off of your own Bitcoin investment, you may be eager to jump right in and get started. These tips will help you to make thoughtful decisions along the way.
Leverage Your Investment
As is the case with most types of investments, you have to come up with cash up-front to invest. You could invest less than $100 by purchasing a small fraction of a coin. However, your Bitcoin investment will grow more substantially when you invest more money. For example, if your $100 investment doubles, you only have $200. On the other hand, if your $8,000 investment doubles, you have $16,000. Some investors are leveraging their investment to raise more capital. This is risky because there is always a chance that the Bitcoin price will drop. However, you can think about getting a car title loan or tapping into your credit cards to access more cash. Remember that you can always repay the money that you borrowed initially within a few weeks if the value of Bitcoin increases as it has been over the course of the last year. You should have a loan repayment plan in mind if you intend to use borrowed money for your investment.
Choose Your Investments Wisely
Your next task is to analyze the investment opportunities. When most people think about investing in Bitcoin, they think about buying the coins. These are not tangible coins. This is a virtual type of currency that is held in a virtual wallet or vault. It can easily be converted to cash, and some retailers and vendors accept Bitcoin as a form of payment in itself. Some exchange platforms also let you access the money through a special debit card. Bitcoin is used as currency, but it is also used as an investment. Because the coins are virtual, some people are not comfortable investing in them directly. You can also invest in Bitcoin through indirect asset purchases, such as stock shares in funds and companies that are linked to Bitcoin in various ways. For example, the stock prices for Overstock.com, NVIDIA and AMD are correlated to Bitcoin.
Think About Day-Trading
It is not enough to simply decide which Bitcoin investments you plan to buy. You must take the additional step to think about how long you plan to hold the investment. For example, some people will day-trade Bitcoin. This is an asset that is extremely volatile, and the volatility in the price makes it ideal for profiting from frequent trades throughout the day. However, day-trading is inherently risky, and there are fees for each transaction that you make. An alternative is to
hold your coins for a longer period of time. Some people will cash out when they reach a certain dollar amount, and others will ride the price to see how high it can possibly go.
Numerous people have already made a huge chunk of money through Bitcoin investing, and it makes sense that you would want to get your slice of the pie as well. As you can see, you need to think through all stages of the investment up-front if you want to maximize your investment potential and reduce your exposure to risk. You can begin by looking for ways to raise capital for your investment, such as by tapping into your car's equity or other sources.
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