Do you know the difference between successful cryptocurrency investors and those who are not in 2020?
The successful ones started their trading in the best USD to XRP Exchange by asking certain questions such as:
– Is Bitcoin a good investment?
– What is the best mode of payment to buy Bitcoins?
– Which is the best Bitcoin investment strategy?
– How much to invest in Bitcoin?
These questions may confuse the beginners, so it is advised to have a mentor. A mentor has gone through all these questions and can guide you through the process.
Before we move further, all crypto investors must know some basic rules and concepts of trading. These rules apply to any individual and any investment vehicle.
–> 1) Invest only what you can afford to lose.
Do not borrow money to invest it, unless it is a safe investment that will pay for itself from its interest. Since this does not happen with cryptocurrencies, do not borrow money to invest in crypto, nor more than you can afford to lose.
–> 2) Rich people invest their money to make passive income
You can work hard all your life to earn active income, but the only wealth that lasts over time comes from our passive income. Whenever your passive income represents more than your expenses, you can stop working anytime and still make money, even if you get sick or decide to travel around the world. Smart people generally invest their wealth in some digital assets like they buy XRP with USD and put their funds in any other cryptocurrency.
Now let’s delve into the major factors that you should consider when deciding how much to invest in Bitcoin or your other coveted cryptocurrency.
Factor #1: Risk Tolerance
The cryptocurrency market is highly volatile. Of course, crypto maniacs believe in the growth of cryptocurrency. But in the end, the future of the crypto market is unpredictable.
So, when thinking about how much to invest in Bitcoin, think of an amount that you can lose. Keep the amount you invest at a level where it does not affect your judgment.
Factor #2: Profit Tolerance
I know you will find it silly, but think about it – if you invest an amount that can get you highly emotional when you lose it, what will happen if you multiply your money by 20 times?
Back in 2017, the same situation happened to a lot of investors when cryptocurrency was booming. They became millionaires because they decided to invest their savings in cryptocurrency.
But what happened later? Do you think they sold their positions and took their profits? No. Most of them went back where they were during the 2018 market crash.
So, it is imperative to invest in crypto wisely.
Factor #3: Change of Mind
Have you ever seen any cryptocurrency investor say “I’ll invest $X in cryptocurrencies” and stick on that particular amount? Might be No. People change their minds by nature, even more, when they are confronted with an ever-evolving market.
So, before you make a final decision on how much to invest in BTC, XRP, ETH, and any currency you want, leave room to change your mind in the future. The easiest way to do this is to divide your investment over time. Set the particular amount in your mind, and invest it within the next 3, 6, or 12 months.
Factor #4: Diversification
Cryptocurrencies are uncorrelated with regular markets such as finance, gold, and stocks.
Do you know what it means? For instance, gold is a correlated asset class. When stocks fall, gold rises and vice versa- they are inversely proportional to each other. But Bitcoin and Altcoins are not correlated. They move on their law and there is no connection to stocks, bonds, etc. This is partly why Bitcoin is a good investment.
Apart from this, they are volatile, which means you want to include various assets in your portfolio to reduce your risk. Diversification is a unique technique any mature investor uses to reduce the importance of luck.
What are the best sites to buy BTC?
There are hundreds of websites where you can invest in Bitcoin. All of them have different offerings and you will have to choose a few based on your preferences. If you are looking for the best fiat to cryptocurrency exchange, then Bitzuri is a perfect place for you to buy your coveted cryptocurrency against USD, EURO, and KES. Invest now to enjoy seamless trading!