With Bitcoin constantly in the news because of the astronomical increases in price, more and more people are looking to invest in it. Typically, when someone decides to buy Bitcoin, they sign up for an account at a cryptocurrency exchange. Upon doing so, they are confronted with other cryptocurrency options that the particular exchange offers.
The next thing that becomes apparent to the new investor is that all of the other cryptocurrencies are much cheaper than Bitcoin. This can lead to the decision to buy one of the cheaper alternatives (altcoins). The logic being that they can buy more of it and maybe even get in on the ground floor of the 'next Bitcoin'.
In my opinion, this is a mistake. Remember, as I wrote yesterday, You Can Buy Part of a Bitcoin. Owning part of a Bitcoin is preferable to having a whole altcoin, or multiple altcoins for that matter. Altcoins will come and go, rise and fall, however, Bitcoin is here for the long term.
This is not a situation where Bitcoin could be the 'MySpace' waiting for a 'Facebook' to take over as the market leader. Bitcoin is better compared to the internet itself. It is the technology around which the future of cryptocurrency will be built. Bitcoin is a truly decentralized, limited supply, non-freezable, non-confiscatable store of value, that also enables permissionless transfer of value.
Bitcoin or Litecoin?
Bitcoin or Bitcoin Cash?
Bitcoin or Ethereum?
Bitcoin or Monero?
Bitcoin or Dash?
Bitcoin or ...?
For me, the answer is Bitcoin.
Bitcoin Cash spiked in price to nearly $4,000 today, after it was listed on major cryptocurrency exchange, Coinbase. In fact, the price started to move upwards prior to this, which has led to accusations of insider trading. The spike coincided with a drop in the price of Bitcoin and created much media interest. The coverage of the story has given a prominent platform to proponents of Bitcoin Cash.
One of the most vocal and influential promoters of Bitcoin Cash has gone as far as to say that Bitcoin Cash is the real Bitcoin. This type of statement has the ability to cause much financial harm when broadcast to potential Bitcoin investors. Those new to cryptocurrencies are often unfamiliar with the history and background of Bitcoin and Bitcoin Cash, and could unwittingly invest in the wrong one if they take what they've heard at face value.
Let me make it clear. Bitcoin Cash (BCH) is not Bitcoin (BTC). Bitcoin Cash is a separate cryptocurrency that was created by a hard fork of the Bitcoin blockchain. It is an altcoin, an alternative currency to Bitcoin.
There are many altcoins, but there is only one Bitcoin and it has the ticker BTC. So if you're looking to invest in Bitcoin, make sure you buy BTC. If you get BCH, you have Bitcoin Cash, not Bitcoin. If you get BTG, you have Bitcoin Gold, not Bitcoin.
Get BTC. It's the real Bitcoin.
Bitcoin mania is sweeping the planet and there are many people wanting to get their hands on the number one cryptocurrency. The problem is, that with the price of a single Bitcoin currently closing in on $20,000, this is simply out of reach for most would-be Bitcoiners. This, in turn, can lead them to walk away, thinking that they have missed out and that it is too late for them.
Many new investors coming into the Bitcoin space are attracted to it because of the phenomenal price increases seen this year. Often, however, they are yet to receive important knowledge and information about Bitcoin, and in some cases have received misinformation.
One of the most common pieces of misinformation is that you have to buy a whole Bitcoin. This is sometimes correlated to thinking of a Bitcoin like a share in a company which you purchase in single whole units. Bitcoin, though, is not a company divided into shares, but a currency and store of value.
The supply of Bitcoin (BTC), unlike regular currencies such as the US dollar, is capped at 21 million. There will never be more than this. On the other hand, like a currency can be divided into dollars and cents or pounds and pence etc, a single Bitcoin can be divided to eight decimal places. In other words, the smallest amount of a Bitcoin is 0.00000001 BTC, or one hundred millionth of a Bitcoin. This smallest unit is known as a Satoshi, named after the creator of Bitcoin, Satoshi Nakamoto.
So, if you want to invest in Bitcoin, but can't afford or don't want to risk buying a whole one, then choose an amount that you can afford or are comfortable with. That could be $1,000, $500, $100 or even $50 worth of Bitcoin. You get my drift. Think of it as a savings account that you can add to over time as your financial situation allows. If you only invest what you can afford to lose, then over time you can increase your Bitcoin holdings. You never know, eventually you may even join the 1 BTC club.
If you own domain names that aren't being utilized at the moment then put them to work to earn you some Bitcoin.
Domain name parking platform Bodis.com makes it quick and easy for you to monetize your domain names with relevant text link ads, as shown in the example below. Every time a visitor to your domain clicks on one of the links, you earn affiliate income, which with Bodis can be paid out in Bitcoin.
To set your domains up like this:
Obviously the better your domain names and the more traffic they generate, the greater the likelihood that your will receive more clicks and earnings. Mind you, the amount earned per click can vary greatly depending on the industry involved and the popularity of the keywords with advertisers.
Soon after posting Bitcoin goes Ballistic and Smashes $11,000 it fell by $2,000 and has since moved back to above 11k. With this level of volatility in the market, and so much money on the line, it is easy to make rash, spur-of-the-moment decisions.
The types of decisions I'm referring to are:
Making these types of decisions can have serious consequences, especially when made under financial pressure, stress or time pressure, whether it be perceived or real. This being the case, it's far better take the time to think things through and develop a plan for what you will and won't do in a volatile market. This sets you up for both present and future action, because one thing's for sure, volatility in Bitcoin isn't going away any time soon.
The following points are suggestions of some of the things to consider when making a plan for how to handle your Bitcoin in a voltile market.
Whatever you do with your Bitcoin, be as prepared and intentional as you can be about the future. More highs and lows will follow, and the temptation to act impulsively lurks in every significant move of the market.
With the SegWit2x hard fork drawing near, the price of Bitcoin is cooling off. After reaching a new all time high above $7,500 the price slid to below $7,000, and at the time of writing it is hovering just above the 7k mark.
Just prior to this price dip, suggestions were surfacing that Bitcoin was about to surge to $8,000. Will it make one more push for that target prior to the hard fork? This remains to be seen. With so much uncertainty and confusion over what exactly will happen with SegWit2x, the market is even more difficult to predict than usual.
Regular commentators in the Bitcoin space vary in their pricing opinions from up to $20,000 by year's end, to, it's reached a top for the year and may fall to $5,000 after the fork. Who's right, if anyone, will unfold in the coming months. The one thing that's certain, is that it's very risky to leave your Bitcoin on an exchange during Segwit2x. Read, Don't Lose Your Bitcoin During the SegWit2x Hard Fork: Secure it Now for more details.
Once your Bitcoin is secure, it's important to take a long term view of its value. When there are wild price fluctuations and uncertainty in the market, it's easy to make rash decisions. The tale of Bitcoin's history, so far, is that those who haven't panicked or made impulsive decisions during turbulent times have come out on top. Be one of them.
This fictitious diary follows the journey of a would-be Bitcoin investor. The dates and prices, however, are based on facts. Can you place yourself as the writer of any of these entries?
January 2, 2013
Bitcoin. What's this? Decentralized digital currency. $13 each. These people are dreamers. This won't amount to anything. I think I'll go out for lunch.
November 29, 2013
Bitcoin rises to $1,100. You've got to be kidding. No way. When I first heard of them earlier this year they were just $13. I wish I'd bought some then. Oh well, too late now, that ship has sailed.
January 20, 2015
Bitcoin slumps. Now valued at little more than $200. Just as well I didn't decide to buy back in late 2013 when it was $1,100. It's still a shame I didn't get in at $13 and sell at the peak. The one that got away. Too risky to buy now. No point wasting money on something that will probably go to zero.
May 22, 2017
Bitcoin soars past $2,000. Noooooo! I had a second chance and I missed it. I could have made 10x in little more than two years. If only I'd bought at $200. It's way too expensive to buy in now.
August 15 2017
Bitcoin smashes the $4,000 mark. What! Double in less than three months. Oh, but it was so expensive. Who knew that this was going to happen?! No way I can play at 4k. What if it crashes? That's a huge amount of money to lose, even for one lousy Bitcoin.
October 15 2017
Bitcoin continues its climb to more than $5,500. This is unbelievable! Another $1,500 in just two months. What was I supposed to do though? I couldn't risk it at that price and I certainly can't now. It's all happening too fast. It's got to be a bubble.
November 4 2017
Bitcoin skyrockets to another all time high. $7,250. Wow! This has reached the point of insanity. Sure, it's easy in hindsight to say that I could have made nearly $2,000 a coin profit in less than a month. In reality it was too big of a risk. It would have crashed for sure if I'd been a buyer. And now, well, Bitcoin is the realm of the rich for sure. That's life I suppose.
Sometime in the future
Wall Street moves big money into Bitcoin. This tsunami of funds has seen the price go ...
If only I'd ...
Please note that while investing in Bitcoin has been profitable for many, you should only ever invest what you can afford to lose.
The rising price of Bitcoin throughout 2017 has seen more and more domainers investing in the Bitcoin space. This was also the case, to a lesser degree, during the bull market of 2013, which saw the price rise from $13 to $1,100. By domainers, I mean those who legitimately buy domain names in order to resell them for higher prices, as opposed to domain squatters who register domains that infringe on the trademarks of others.
This move into Bitcoin by domainers makes perfect sense, due to the similarities between the two investments. Domain names, like Bitcoin, are digital assets that can produce returns on investment unheard of in other asset classes. Seeing Bitcoin rising, after the crash in late 2013 and the subsequent plateau in price that lasted until late 2016, has convinced many domainers that Bitcoin is here to stay, with the potential for even greater gains in the future.
Domainer investing in Bitcoin has come from multi-millionaire heavyweights of the industry who own portfolios of single word .com domain names, right through to those who flip low value domains to other domainers on forums. This across the board interest has led to some leading domainer blogs publishing Bitcoin related content. In turn, a debate has arisen as to whether domainer blogs are the appropriate platform for discussing Bitcoin.
While Bitcoin is rising in price, this trend of domainer investment is likely to continue. If, on the other hand, there is a significant crash followed by an extended period of lower prices, then domainer money will likely leave Bitcoin and go back into domains.
Many cryptocurrency investors are rushing to move their money out of altcoins and into Bitcoin. This has been sparked by the continued bull run of Bitcoin to a price beyond $6,000, and the upcoming Bitcoin Gold and SegWit2x hard forks.
These hard forks will see Bitcoin holders rewarded with free cryptocurrency dividends, in the form of Bitcoin Gold and SegWit2x coins. Rewards for each fork will match the quantity of Bitcoin that an investor holds.
While some may move money back into altcoins once they have received their free coins, this remains to be seen. Where the price of Bitcoin lies when dividends are distributed, and the opening value of the free coins themselves, will certainly contribute to the decisions investors make in this regard.
1. Buy and Hold
Buy Bitcoin, don't sell it, don't trade it, just hold it. This strategy has served many Bitcoin investors exceptionally well over the journey. While there have been some serious price crashes along the way, eventual rebounds to new all time highs have always followed, so far. Those who haven't panic sold during the dips have reaped the rewards of the peaks.
Buy and hold is a simple strategy providing that you only invest what you can afford to lose. When you don't abide by this, things aren't quite so easy. In fact, they can get seriously ugly. If there is a major crash in price, followed by an extended recovery period, you may be forced to sell at a loss if you need the funds. This happened to many people who bought at the peak in 2013 and the losses they took were huge. For those who didn't need to access what they invested and have held until now, the losses never materialized, and incredible gains in price have followed.
There are those who have made their fortunes trading bitcoin, however, they are the minority. Most traders lose, and in a volitile market like Bitcoin, the losses can be swift and significant.
If you are going to trade with peace of mind and keep your shirt if things go south, then only invest what you can afford to lose. Next, either be an experienced trader in other markets, or learn how to trade, read and interpret charts and understand and manage risk. If you go in green then you are taking up gambling, not investing.
3. Buy, Hold and Take Profits
This is a variation of buying and holding, where you hold an amount of Bitcoin that is at least equivalent to your initial cash investment and take out profits when you need them.
The downside to taking profits is that you are decreasing, rather than growing, your Bitcoin holdings over time. A drop in the market can also reduce the value of your holdings to an amount lower than your initial cash investment. And if you find yourself moving money in and out and trying to time the market, you have become a trader.
4. Hold Some, Trade Some
This is where you set aside a percentage of your Bitcoin that you will hold and a percentage that you will trade. Now if you have one or two successful trades, it can be tempting to think that you're an expert and risk trading more of your Bitcoin holdings. Be careful. A series of good trades can be quickly erased by one bad one. Good intentions of a 90% hold, 10% trade portfolio can turn into an 'all in' which usually results in a 'win for the house' so to speak.
Bitcoin to the Moon is dedicated to following the original cryptocurrency on a journey to its ultimate destination.
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