4 Signs You Can Invest in Bitcoin
To say that Bitcoin’s price has increased dramatically over the past few months would be an understatement. The cryptocurrency is currently valued at $19,000 and despite some volatility, it has made multiple highs over the past year. Additionally, Tesla made headlines when its CEO, Elon Musk, revealed that the company would purchase $1.5 billion worth of bitcoins, which helped push the cryptocurrency’s price higher.
Bitcoin has proven divisive, with many investors supporting it and many others trying to avoid it at all costs. Here are four indicators that show you’re ready to invest in Bitcoin if you’ve given it some thought.
- You are willing to take bigger risks
Despite its rising price and popularity among many investors, Bitcoin remains a precarious investment. Over the years, its price has fluctuated wildly, sometimes losing up to 80% of its value. It has experienced significant declines in recent months and is still in the recovery phase. Before investing, make sure you can withstand these extreme price swings.
Not everyone can handle this volatility, so only give in if you can handle the risk. Can you sleep at night if you buy bitcoin now and tomorrow it’s up 50% or down 20%? Imagine it falling 50%. What about 80%? If you can handle the volatility and all the risk, a platform like https://immediate-edge.co/fr/ will help you in your trades and investments. You can determine whether or not Bitcoin is the ideal investment for you by being aware of your limitations.
- Your portfolio is diversified
A well-diversified portfolio is always a good idea, regardless of your investment approach. But it’s even more important when it comes to a volatile investment like Bitcoin. You cannot accurately predict Bitcoin’s performance. That means you need backup assets in case something goes wrong. You can build a diversified portfolio in a number of ways, all of which will help reduce your overall risk:
- Invest in index funds: A core portfolio of index funds can significantly reduce your risk. You won’t lose everything when Bitcoin crashes if you spread most of your savings across hundreds or thousands of different stocks.
- Invest in a range of sectors: If you decide to buy individual stocks, try to buy companies that operate across a range of sectors. Even if you own a dozen or more stocks of companies, you risk putting all your eggs in one basket if they’re all in the same industry. When investing in Bitcoin, you want your base portfolio to be as stable as possible.
- Maintain your investments in reputable companies: A portfolio full of stocks can perform well and help reduce your overall risk. That doesn’t mean you should only invest in reputable companies, but you should avoid putting most of your money in startups.
When it comes to diversity in your portfolio, there is no standard. However, you may be ready to add Bitcoin to your portfolio if you already invest in several reliable companies that can stand the test of time.
- You can make long-term investments
Buying reliable investments and holding them for as long as possible is one of the best strategies to make big bucks in the stock market. The same goes for Bitcoin, so think about how long you’re willing to wait to see a return.
Now might not be the best time to invest if you’re short on cash and expect to sell your investments in the next few years. On the other hand, if you can keep your money invested for at least five to seven years, or even longer, you might be ready.
- You don’t spend your savings
Bitcoin investments are very volatile and risky. Investing all of our savings in crypto could be disastrous for you and you could lose it all. Invest only what you are willing to lose. As mentioned before, don’t put all your eggs in one basket.
