Bitcoin can seem like a great investment for beginners, but Bitcoin, and cryptocurrencies in general, are a very complex class of asset. This is why a lot of people, even those who’ve been in the crypto space for many years, often have difficulties understanding market movements. This means that you will need to study Bitcoin in detail before you decide to invest, as it’s easy to get burned. Let’s take a look at some tips all newbies should follow when investing in Bitcoin.
Don’t Get Caught By FOMO
FOMO is an acronym for “fear of missing out” and it characterises a lot of new beginner investors in crypto. They might notice that Bitcoin is going through the roof and want to get in before it’s too late. But we have bad news for you. If you didn’t get in when Bitcoin was under the USD 10,000 mark, it might already be too late to make massive gains.
Bitcoin is starting to look more like a store of value at the moment than an opportunity to get rich quickly. So instead of investing because the price is up 15%, look at long-term trends. Sudden rises are often followed by sharp drops and knowing trends will give you a better idea of base support levels so you can get into the market at the right time.
Exchanging Fiat for Crypto
One thing you might be surprised to find out when investing in crypto is how tough it can be to exchange fiat currency for cryptocurrencies. Many exchanges will make it impossible to do so, and those that do will often have you jump through all sorts of hoops first.
If you wanted to purchase Bitcoin with cash or online wallets, your best bet would be to go with a P2P exchange like Paxful. They allow you to trade Bitcoin directly with other users and with all sorts of payment options, including PayPal, which is pretty rare with regular exchanges. You’ll also love the transparency of knowing exactly who you’re dealing with and won’t have to deal with some of the limitations of traditional exchanges like having to produce ID.
It all Starts with a Wallet
As a beginner, you always have the option of buying cryptocurrency and keeping it on the exchange, but it’s not recommended. You never know what could happen with that exchange. Some have been hacked while others have gone under, and crypto exchanges are not as tightly regulated as stock market exchanges. So, you may have limited recourse in case something happens.
This is why you need to find yourself a good wallet first. You can pick a hardware wallet, a software wallet, or even write your keys on a piece of paper. Hardware wallets are better for large amounts as they’re safer and don’t have to be connected to the internet. Software wallets are a bit less safe, but more convenient and are perfect for fast transactions.
These are all things that you have to know before investing in Bitcoin as a beginner. Learn as much as you can about it and don’t invest based on what some self-professed guru had to say on the internet.