By now, you would have heard about how the price of Bitcoin (BTC) nearly surged past US$60,000 before dropping again to about US$43,000 within 2 weeks. If you have the heart to stomach this type of price change, then you would probably be considering entering this market.
Always be in the know
Before you take some of your funds and start investing and buying BTC, you might want to take a step back and learn more about this market and cryptos. While the underlying principles are similar to other forms of investments, there could be other issues that you might not be aware of. So, unless you know and can accept the following factors, cryptos might not be the right market for you.
The facts and practices
- Not just investment – BTC is not like stocks where you buy and keep them for a certain price before selling. It can actually be a currency as it stores value. Like your common fiat currencies, the value changes over time. The only difference here is that the price change can be quite fast and unforeseeable. To draw any similarities with other engines, it would be closer to gold than fiat currencies.
- Time difference – If you have traded foreign exchange, you would be aware of the time difference as markets are closed on weekends and public holidays. This is not the same with the crypto market as it is open every day, all days. This also means that transactions are done in real-time without the need to wait like how you do with banks traditionally.
- Moving of funds – While transactions can be done instantly if you want to move your funds in and out of your account, it might be different. In this context, it might require the banking hours to be in operation.
- Storage of crypto – Cryptos can be stored on digital platforms and this makes it a lot more convenient. However, you will still need a place to store your own cryptos. The reason here is that you might not want exchanges to store your cryptos because of hacking and network risks. When you have your own digital wallets, it gives you more control and you get to better manage your funds. Furthermore, it gives you better security management too.
- Social media resources – You must always know what is going on in the markets. Resources are available online and social networks are your best places to get instant news. Join the groups or be in the news feed for cryptos if you cannot afford the time to browse and look for the latest news. Follow the gurus in cryptocurrency trading as they are always willing to share secrets to trading, new resources, strategies and predictions too.
- Allocate time – One of the biggest mistakes investors make is in thinking that the crypto market is the same as other money markets. This is a time-consuming process where you have to allocate time and effort to learn about. Check out videos on who cryptos are traded, how transactions are done so that you can control your money better. Things can change in a blink of an eye when it comes to digital platforms. Be there when it happens and be on the lookout all the time. If you are cannot afford the time, then this market is definitely not for you.