In recent years, cryptocurrencies have become forces to be reckoned with, and with its rise, many people have started to invest in Bitcoin, the king in the crypto world.
Bitcoin Over the Years
Since it was first launched in 2010, Bitcoin was the first-ever digital asset to bring forth the entire cryptocurrency ecosystem. Since then, it has grown a massive following of investors and traders who have become optimistic and hopeful towards the future of what’s to replace the physical monetary system.
However, the cryptocurrency space has always been a highly volatile world. And from there, more and more digital coins have launched in the market, and most are without any regulation or even supervision. During this time, it skyrocketed the valuation of Bitcoin to as much as $20,000 per Bitcoin in 2017.
However, through the course of 2018, the value of the biggest cryptocurrency in the digital world has steadily declined, settling between the $3,500 to $4,000 range for a significant period.
Following the rapid rise of Bitcoin and its subsequent decline, many investors have been having second thoughts in investing in cryptocurrencies. However, recent activities for the crypto giant is looking towards a significant increase, which has caught the attention of investors again.
How to Invest in Bitcoin
With the increasing optimism in terms of the Bitcoin price, more and more people are leaning towards the positive on why invest in Bitcoin questions. But, according to some market analysts, when investing in Bitcoin, one should forgo the instant gratification type of mentality as the first step in learning how to invest in Bitcoin.
Although the crypto market has a lot of potentials, it’s not a “win big” solution overnight.
According to Parul Gujral, CEO of Snowball, that kind of mentality when investing in Bitcoin can be a recipe for disaster. He agrees that it is possible to win big, given that the digital market is right. But, like what happened in 2018, people can also lose as big, Gujral said.
Gujral said that one of the keys to gain success when investing in cryptocurrency is diversifying risks through investing in a basket of cryptocurrencies.
According to Warren Buffet, investing in stocks can also be key in mitigating the risks when investing in Bitcoin. When investing in indices like the S&P 500, the risks and fees are significantly lower. Plus, it is tax-optimized.
A partner at the Pantera Capital, Paul Veradittakit, has also recommended diversifying digital currency investment when people decide to invest in Bitcoin today.