Investing in cryptocurrency is an economical phenomenon, reality show it again and again these past few years. This arises a very interesting question regarding the true value of cryptocurrency, with Bitcoin at the top list: Is Bitcoin a means to an end, a currency, or is it a commodity in itself?
Well, to answer this question we can observe its dynamic variation over time, and conclude it is actually both.
People who have purchased it in the past are now proud owners of substantial revenues, generated out of a vibrant, profitable trading arena. It is not just about a coin, it is about the traffic it brings on a constant basis, along with diverse investment options like long or short term ones. How does that affect the value of Bitcoin?
How Long Do You hold a Coin?
This question relates to the definition of long/short term investments. If you consider yourself as a long term investor, you are likely to follow coin`s rates and price shifts intensively. The main principal of this trading type lies on the period of time you are willing to hold your coin of choice, while you wait its value to rise. Naturally, if the coin`s price goes up higher than when you initially purchased it, you make a positive profit. Many investors believe that due to Bitcoin`s recent rate drop, now is a great time to buy it, as it is expected to rise again soon. As market capitalization boosts up for Bitcoin as an ongoing trend, and more people adopt this method of trading, it is inevitable that its value will be prompted yet again.
At the other end of the spectrum stand the short term investors. This method of trading relies on the cryptocurrency price volatility. In its early years, Bitcoin was characterized with intense volatility that showcased an unstable movement. This have caught the eye of those who saw great profit in the opportunity to buy Bitcoin, as they hurried up and sold it the minute its price dropped.
When you look at these two main trading preferences, it’s quit noticeable that long term investment is a more common form of trade. Why? Because Bitcoin has endured a lot the past few years, and its market adoption only increases. Crypto stability strengthens and experts are loudly saying that now is the time to buy cryptocurrency. Just look at its growth over changes of time.
It`s Profitable, If You Play by the Rules
Investment, of any kind, always inhabits a percentage of risk, low or high. People who have yet to trade with cryptocurrency may look at this market`s extreme rate jumps and think the risk is higher than the gain. But, if you learn the subject and gather the basics, you can make yourself an active participant in this scene, and enjoy its revenues for the long run. What is there to take in mind?
Spread your wealth: don’t ever put everything you want to invest in one source of trade. In order to minimize the risk factor you need to spread portions of your investment on top of several channels. That way, if you lose some money at one position, it wouldn’t dramatically affect the rest of your investment.
Use high-end technology available: there is a paramount technological development in the field of crypto trading, so the available tools and options you have at your fingertips are endless. It is much easier and simpler to base your investment upon such platforms, and so it directly affects the dynamics of your transactions.
Market comprehension: just like any other field of knowledge, the more you are familiar with the details and are up to date with new information – the more you would be able to utilize it for your own benefit.
When to get in and when to get: it isn’t just about knowing when to buy cryptocurrency, but also when to sell it. Timing is crucial in trading and there are many factors that may change its value. That`s why you need to be alert and responsible.
The important thing to remember when entering this economic hub, is to play sportively. As the saying goes, “you win some you lose some”, so be ready to taste it all. Along time, when you will become more professional in cryptocurrency trading, you would be less subjected to emotional decisions, and far more directed to decisions that are based on concrete knowledge. Keep it in proportion, don’t invest everything you have. That`s how your fall and rise will be controlled.