While choosing to invest your hard earned money in any investment, including Bitcoin comes with a degree of managed risk, there are a few simple ways to decrease your chances of losing your initial investment. Continue reading below to find out how to safely invest in Bitcoin:
1. Don’t place all of your eggs in one basket
While the likelihood of making an incredible return on your Bitcoin investment is high, make sure never to invest funds which you may require to pay your bills or to put towards your children’s college education or your retirement. As no investment is 100% guaranteed to produce a return, so you should never invest cash which you made need to withdraw in a hurry.
2. Don’t purchase all of your Bitcoins in a single transaction
Instead of investing several thousand dollars into purchasing Bitcoin in a single transaction, it’s far wiser to split your investment into several transactions, over several months. As Bitcoin’s price is always fluctuating, if you purchase Bitcoins on a regular basis the average price which you’ll pay for your Bitcoins will average out, and you’ll avoid paying a premium for your Bitcoin.
3. Store your Bitcoins in a secure Bitcoin wallet
Once you’ve successfully purchased your Bitcoins, you’ll need to store them in a secure Bitcoin wallet. As Bitcoin is an anonymous digital currency, which can’t be stored in a traditional bank account and can only be stored in online Bitcoin wallets. You may be surprised to learn that there are a variety of different types of Bitcoin wallets, two of the most popular of which are hardware wallets and paper wallets.
Paper wallets are the cheapest Bitcoin wallets available and require owners to write down the keys to their wallet on a physical piece of paper and are a great option if you’re searching for a cost-effective way to store your Bitcoin. If you’re willing to pay a little more for a secure Bitcoin wallet, you may be better off opting for a hardware wallet.
A hardware wallet utilizes a physical, tangible piece of hardware to store your Bitcoin and is a more secure way of storing your bitcoin than a cheap paper wallet. Investors who invest several thousand dollars in Bitcoin should invest in a hardware style wallet from a reputable company such as LedgerWallet or KeepKey. Both of which are highly rated.
4. Make sure the site you choose to deal with has a positive reputation
You have two options as a Bitcoin investor, you can use an online broker to purchase Bitcoin on your behalf through a reputable online broker such as eToro or RobinHood, or you can choose to purchase Bitcoin through a Bitcoin exchange. The latter of which allows you to efficiently cut out the middleman and buy Bitcoin directly from an individual.
If you choose to sign up for a popular Bitcoin exchange, just ensure to read a variety of unbiased reviews, before parting with your hard-earned money. So if you’re serious about minimizing your risk as a Bitcoin investor, it’s well worth taking the four tips listed above seriously!