As Bitcoin continues to grow, the anxiety of missing out on the chance to invest in the world’s largest cryptocurrency at an advantageous price grows daily. At the end of November 2020, for the first time since December 2017, Bitcoin went over the $18,000 mark, which is approximately 10% less than its record maximum value of $20,000.
Some analysts are confident that the anticipated threshold of $20,000 is just the start of an anticipated blast to the price of $1 trillion; it is possible that it is not too late to add BTC to our investment portfolios.
Bitcoin is pricey, to say the least, but if you don’t have much capital, you don’t need to buy an entire coin. You can start buying parts of it – for example, for $15 – which will be equal to the current price of 0.0008 BTC. Getting started with investing in Bitcoin is not as hard as you think. This article will explain how to invest in BTC and give you some useful tips along the way.
Is it Too Late to Invest in Bitcoin in 2021?
FOMO (fear of missing out) is common in trading, especially when dealing with highly volatile assets such as Bitcoin. A main feature of BTC is unexpected surges. The most recent one started in October 2020 and led to a new all-time high (ATH) in December.
It might seem as if you have missed your chance to buy low and sell high. We want to assure you that is not the case. Many investors believe that Bitcoin will continue growing. Analyst Lark Davis drew attention to the results of BTC’s technical analysis.
Opportunities for positive movement of cryptocurrency in the future, in his opinion, will soon visually “level” the sharp jump in the Bitcoin rate of 2017 with other peaks. To clarify his point of view, he asked the readers of the microblog to pay attention to how insignificant the growth of BTC in 2011 and 2013 seems today.
Another famous analyst in the crypto community – PlanB – also noted the prospects for Bitcoin’s further positive movement, based on the achievements already realized by the digital asset.
Three BTC Investing Strategies
Those who have freshly entered the cryptocurrency market tend to lose money on it. There may be various reasons for this. Emotionally, newbies can act illogically and make errors in pursuit of hasty profits. The incapability to manage risks also leads to substantial losses. You can dodge counterproductive trading by using simple (beginner) strategies.
Buy & Forget
Perhaps the simplest strategy is to buy BTC and keep it as an investment for a long time. In this case, money is invested in the asset that will not be needed in the near future. Otherwise, if the coin’s value falls, you will have to sell it at a loss.
This strategy involves long-term investments- for example, BTC – in anticipation of the price increase in the coming years. Even when buying Bitcoin for a long time, it is crucial to choose the right moment. The following strategy – averaging – can help to find the right moment.
Averaging
Finding a textbook moment to buy Bitcoin is impossible. At whatever price the trader buys the asset, it will likely decline before entering the long-term growth phase. Therefore, some investors use the averaging strategy: the user splits their capital into several parts and buys Bitcoin with them over time. Thus, if the price of an asset drops, they can use this as an opportunity and buy more coins. In this case, the average BTC purchase price will decrease. Each user can decide for himself how many parts he will divide the capital. The more there are, the more average the price will be. The best option here is to invest in BTC for a small amount every day.
You can start with this strategy right now – in positive news, BTC’s halving, and the policy of central banks that print money, thereby depreciating it, speak in favor of the rise in the price of the cryptocurrency. However, it is essential always to have capital if the BTC price drops by half or more.
Diversification
You can invest in other coins, too, you know? By dividing your capital between BTC and other cryptocurrencies, higher returns can be generated. However, the risks, in this case, also increase due to volatility. Relative to their value, altcoins can have significantly higher return rates than the leading digital coin.
For example, on March 12-13 this year, the Bitcoin price fell from $8000 to $3800 – by 53%. At the same time, Ethereum fell by 60%, from $213 to $86. Then the altcoin lost more value than BTC, but it has risen in price much more by the current moment. ETH growth since the March collapse was 345%, whereas BTC showed a whopping 250% increase in value.
As such, another smart way to diversify your investment portfolio is to add other asset classes, apart from cryptocurrencies.
