Source: 99bitcoin
One of the most common questions asked by both Bitcoin pros and newbies is how to make the best out of BTC in 2021. The volatility of Bitcoin Price is a widely known factor. People saw the different drama that came with BTC in the year 2020, and they wouldn’t want to miss out on Bitcoin investment this year. Let’s assume you spent less than 1 cent buying Bitcoin in 2009; the 1 BTC you bought then will currently be worth over $35,000. In other words, investing $100 in Bitcoin in 2009 means you will currently be worth over $180 million.
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That is not baiting but a real analysis of how the Bitcoin ecosystem and BTC price has grown over the years. During those years, it hasn’t been all bed of roses. There have been spikes and dips. However, in the long run, investing in digital assets looks more profitable.
The number of retail clients willing to invest in BTC keeps growing, and the major concern is that only a few people have a clear understanding of how to invest in Bitcoin and how the market works. This is the essence of writing this article. If you want to know the best Bitcoin investment tips for 2021, ensure you read this article till the end.
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Bitcoin Price trend
It is an undisputed fact that we have seen BTC gain value over the years. Bitcoin price upwards and downward movement have made some people turn their back, and some are still exploring the positives. Analysis has also shown that Bitcoin might still sell at hundreds of thousands of dollars.
If you are more concerned about when to invest in BTC in 2021, try waiting for the period when the price of Bitcoin is on a downward trend. It is also important to add that there is no perfect time. You will never know when an upward trend will follow the downward trend. You don’t know if the downward resistance level is strong enough to prevent further downward movement.
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There are positive potentials for bitcoin investment. If you are a small investor, don’t put all you have into Bitcoin. Start your investment with a small amount, study the market before adding more investment. When the bitcoin price and market are stable, you can put in more investment.
Investment tips that will help you make a profit in 2021
There are many investment and trading strategies you could apply in 2021. Making a consistent profit is the only proof that a strategy works. Regardless of your strategy, here are a few tips to help you stay ahead in the market.
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Ensure you have a straight forward financial goal
You can have different ways of investing in Bitcoin. Your investment goal might be long term or short term. If you are familiar with day trading, making interest in the short term is feasible. On the other hand, long term investment will take off the stress of following daily and weekly bitcoin trend. You can set a long term goal of keeping your bitcoin until the bitcoin price hits $50K. Irrespective of the investment goal you have, ensure you make it clear and work towards achieving it.
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Let your investment have a dollar-cost average
It is an undisputed fact that bitcoin has outperformed other digital assets in the last ten years. At the same time, it is the most volatile. If you are inexperienced, you might have issues when bitcoin dips. A practical example is when bitcoin dipped by 50% (from $10K to $5K) in the first quarter of 2020. An inexperienced investor might want to cut losses and take out all funds. On the other hand, a patient investor that held on to BTC will be smiling now that BTC is above $35k.
A good strategy is to have a dollar-cost average. This means your investment will be periodic. You might choose to invest $500 on the first day of every month. This will help you make your cost price variable. It will also reduce the effect of short term volatility.
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Ensure you diversify investment
One of the most important strategies is diversification. Don’t put all your eggs in a single basket. The meaning of that statement is: don’t pump in all your crypto investment in bitcoin. There are other cryptocurrencies like Ethereum, Litecoin, Ripple, etc. Diversifying in other cryptos will help you cover up for the loss if the bitcoin investment doesn’t go well as planned.
Top questions on bitcoin investment
How much should be committed to bitcoin investment in 2021?
You can never have an exact amount that is worth investing in bitcoin. Your financial goals, budget, investment plan, and risk level determine how much you will invest in bitcoin investment.
Will bitcoin have a move similar to what happened in 2020?
It is an undisputed fact that the bitcoin price went up by 4X in 2020. Nobody can predict what bitcoin has in store for 2021. This is more reason why the dollar-cost average investment strategy is a good option.
How do I go about my investment?
Ensure you invest through a regulated and widely accepted exchange. Make your deposit and indicate the amount you are willing to invest in BTC.
How much is the minimum I can invest in BTC
BTC is not a discriminating form of the digital asset. You can invest as low as you want and as high as you want. The fact that you can buy smaller units of bitcoins called satoshis makes investing smaller amounts easy.
Can I lose money?
Any investment can turn out positive or negative. You can gain or lose money in BTC investment. If you buy when the current bitcoin price is high, and your investment plan ends when it’s low, you might run at a loss.
Conclusion
The ultimate tip for anybody interested in Bitcoin is to learn about the intrinsic values of the groundbreaking digital currency. There are various ways you can invest in bitcoin. The tactics that work for Mr. A might not work for Mr. B. The bitcoin fluctuation rate, the time you will sacrifice to monitor the bitcoin price, bitcoin trend, and market, and your ultimate goal will influence your strategy.