If you’re thinking about investing in Bitcoin, the first step is to define your goals. Despite what many people would have you believe, making money in the cryptocurrency market isn’t easy. In fact, many investors only say this after riding the surge in the price of Bitcoin over the past year with zero technical analysis.
You must be wiser than that if you really want to make the most out of your investment. Here’s a quick guide to help you come up with well-thought-out goals and learn whether to invest for the short- or long-term.
Long-Term Bitcoin Strategy
This strategy is often called “hodling” by cryptocurrency investors. It involves investing in Bitcoin or other digital coins and holding on to them for a long time period, usually at least one year or after meeting certain conditions.
Many beginners choose this strategy because of its simplicity. It is based on the assumption that Bitcoin’s price will increase over the long term. You hold on to your coins or even invest some more despite dips in price.
Why Choose Hodling?
- You want to get started with cryptocurrencies easily
- You lack the time or motivation to actively invest in Bitcoin
- You don’t know how to do a technical analysis
- You feel confident that your coins will rise in value in the future
Short-Term Bitcoin Strategy
If you’re looking for something more involved, then short-term trading might be the better fit for you. Investing sums in your cryptocurrencies of choice and holding on to them for the short term present a huge earning potential when done correctly. You can trade your investment just a few minutes after buying it if your conditions are already met.
This approach requires a lot more time and effort. Also, you must accept the volatility of the market and use it as an opportunity to maximize profit. A drastic change in price might scare off many investors, but this can be the perfect time to buy or sell your assets. You can make the process even easier with the help of a trading robot like Crypto Code, which executes trades according to the rules you set.
Why Choose Trading?
- You are confident with your technical analysis ability
- You want to see returns as soon as possible
- You have enough time to trade more actively
Regardless of the Bitcoin investment strategy you choose, remember not to invest more money than you’re willing to lose. Your choice should also depend on your motivations and goals. If you want a passive strategy, hodling is your best bet. If you want to take advantage of the market volatility, try trading.
Of course, you always have the option of using both. Many recommend investing most of your money for the long-term while setting aside some money for trading. This offers the advantage of improving your trading skills and developing the habit of doing technical analysis on a variety of coins. Also, remember that more trades do not necessarily mean more profits. In most cases, you’re better off making fewer but more educated investment decisions.
If you are interested in even more cryptocurrency-related articles and information from us here at Bit Rebels then we have a lot to choose from.
Disclaimer: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. Invest responsibly and never invest more than you can afford to lose.