If you know a bit about bitcoin, you’ve seen the massive upwards trends of the cryptocurrencies market. Fortunes were made and unmade as speculation and investments poured into the market.
If you’re looking to get your share of the pie, keep reading to learn about the best bitcoin investment strategy.
The best investment strategy is simply the buy and hold strategy.
While it may not be the most interesting strategy, it’s the safest and most reliable way. Get a return on your bitcoin investment. If you believe in the longevity of bitcoin, this method will give you the best ROI over any other investment strategy.
Think about it: only 21 million bitcoins can ever be created. Because the block reward halves every four years, estimates show that this number will be reached by the year 2140.
And, although this date is quite a few years away, it’s inevitable that bitcoin will become more valuable the closer and closer we get to that figure. The Law of Supply and Demand tells us that as demand increases (which it steadily is as bitcoin and other cryptocurrencies gain wider public attention), and supply decreases (which it eventually will), the value or price will go up.
With this knowledge, it’s safe to say that the buy and hold strategy might be the most secure and easiest way for a beginner to make the most money out of a bitcoin investment. It is a long-term play, but in the end, will most likely win out over other shorter term and more volatile strategies.
If you’re a day trader, fine. Maybe you know a few things and you have what it takes to make good money off of quick bitcoin transactions. Granted, there are a lot of day trading techniques out there that you can read and learn about. But, they generally won’t work for beginners, especially those with no experience in day trading at all.
If you’re just starting to get into bitcoins and cryptocurrencies, think about it. Could you confidently go to a market exchange right now and start trading stocks? If the answer is no, then apply that same logic to trading bitcoins. Although it may seem different, it is in essence a currency like any other, subject to the same risk and volatility.
Even with this knowledge in mind; you still might be tempted by the high returns offered on a lot of bitcoin investment sites. Don’t fall for these schemes. Anyone that tells you they can give you a 10%, 20%, or even 30% return in a few hours isn’t giving you the whole truth. That level of success is inevitably associated with a high level of risk, so beware the tempting percentages you’ll see on these sites.
Instead, the beginner investor should look into how to buy in at the right time. Although the bitcoin market has seen a significant upward trend overall, if you look more closely you’ll see that there have been great drops where people lost confidence in bitcoin and lost a lot of money. Knowing this, keep this in mind:
It’s important not to be trigger happy.
This means that you don’t buy or sell daily, monthly, but instead invest in the long term, over years. There will be times where the market dips or shoots skyward, and you feel tempted to sell. Avoid the temptation. This is the time to buckle down and believe that your eventual long-term investment will pan out; when bitcoins created start to reach its limit. That is when most of your profits will be gained.
As a final note and reminder, most people that follow day trading schemes are looking to get rich quick. Most of these schemes fail. The buy and hold strategy is a simple one, but it’s one that is reliable and proven to work in many markets. You won’t see anyone talking about it because most people are trying to sell a product and get your money. Be smart and take the cautious option.
With the buy and hold strategy, you’ll see the best RIO over the long-term. Now be safe and have fun investing.