With the introduction of the Bitcoin in 2009, there has been the growth of an entire ecosystem of cryptocurrencies. Soon afterward investors started to show a keen interest in using cryptocurrencies as a replacement for physical money. This transition is not due to happen anytime soon but the crypto market is known for being unpredictable.
During the adoption of crypto coins, many investors launched the ICOs or Initial Coin Offerings without regulations. This witnessed a sudden rise in Bitcoin prices in 2017, but then the value started to fall sharply throughout 2018. However, the recent invention like bitcoin superstar has helped the investors to make good profits out of bitcoin trading as it predicts the prices almost accurately.
With this meteoric rise and then subsequent fall of the Bitcoin, investors became apprehensive. However, things are slated to change now as more and more regulatory controls seem to be in place by interested government agencies. There are some useful tips about investing in the Bitcoin offered by well-known experts in the field:
1. Diversify Your Risks
Most experts agree that it is better to diversify your risks when investing in cryptocurrencies like Bitcoin. Most people today think that they can become millionaires overnight.
But this may actually be the worst assumption because according to expert Parul Gujral, it is equally possible that you can lose big. So, it is advisable to invest in more than one crypto coin so as to minimize risks of losses.
Warren Buffet recommends index investing because the risks and fees are lower; it is also tax-optimized and it is possible to outperform the market. Earlier, investors were putting in all of their eggs in one basket and losing big when the market deflated as it did in 2018.
2. Invest Via Regulated Professionals
It is also a good idea to invest via regulated professionals. The bigger challenge is however to identify such professionals who can research and then recommend portfolios to you that will guarantee you a steady ROI. While there are plenty of options if you are searching for investment platforms and cryptocurrency apps, it is best to look for financial professionals who have been certified as Registered Investment Advisor by the SEC.
These RIAs will have an obligation to their client to offer advice only in their best interests. So, these professionals are not simply regulated but also responsible for their recommendations and investment advice. With the cryptocurrency system expanding and becoming more and more complex, knowing which tokens or coins are worth investing in will be a challenge.
So, if you can work alongside registered financial professionals your task becomes much easier and you can save time as well as increase your chances of making profits. You can also consult the SEC investor bulletin to get access to the questions to ask when you meet a financial professional.
3. Educate Yourself
You can never undermine the value of research and independent study when it comes to making investments. You should never entrust your money ignorantly to an advisor, no matter how accomplished he is. So, you must start by educating yourself by watching short video tutorials online and doing quizzes.
There are some people open to the ides of day-trading in a big way or timing the market. But the average investor who is new to this field may not be keen to expose himself to such a risk. He may be looking for a far more conservative approach.
So, if you have the skills and time to day-trade actively, you should go ahead. But if not, then you need to find companies or projects to invest in. In such a situation it is best to focus on projects that are in for the long haul; you must identify founders with a mission, people who have previously been successful and play alongside them.