Finance

Bitcoin Do’s and Don’ts

Bitcoin do’s and don’ts

Bitcoin is the world’s oldest cryptocurrency. It is sometimes called a virtual currency or digital currency. It is a peer-to-peer network that provides a Bitcoin exchange system. Bitcoin is not regulated by any bank or government. It is a decentralized computerized Bitcoin exchange system. Bitcoin users store Bitcoin in Bitcoin wallets or Bitcoin exchanges. The Bitcoin user may convert Bitcoin into other types of currency and vice versa. The value of Bitcoin fluctuates wildly because it is not backed by any traditional assets (such as gold) or government support like physical cash. There are many Bitcoin do’s and don’ts that we should be aware of.

In this article, we’re going to take a look at Bitcoin do’s and don’ts.

The Do’s

Bitcoin do’s and don’ts

Research first

Researching is the most important thing you need to remember when learning Bitcoin do’s and don’ts. Learn about Bitcoin and Bitcoin wallets that are available. Know Bitcoin’s ROI, risk factor, Bitcoin exchanges, Bitcoin mining, and Bitcoin white paper before you get started with investing in Bitcoin.

Research what is important to you – with this research, you will be able to make a fully informed decision on whether or not to invest any amount of money in bitcoin.

Here are the two popular online sources offering the latest cryptocurrency news:

  1. Coin Desk
  2. Bitcoin Magazine

Join Bitcoin-related forums, groups, communities, and social network

Bitcoin is an excellent source of earning money while providing financial freedom to people all over the world. Since it’s been a worldwide success, Bitcoin has been gaining more and more attention from the media. Joining Bitcoin-related forums, groups, and communities is a good way to meet people interested in Bitcoin the same as you, and learn Bitcoin from people with great Bitcoin experience. From Bitcoin-related forums, you can learn Bitcoin basics and get all the information you need about Bitcoin.

Store it in a Bitcoin wallet

Storing your Bitcoin in a wallet is a must. A Bitcoin wallet is a software or hardware where you store your Bitcoin.

When selecting your Bitcoin wallet, make sure to pick a reputable one that has been around for quite some time and has never been hacked before.

There are two types of Bitcoin wallets – Hot Wallet and Cold Wallet.

A hot wallet refers to Bitcoin wallets that are accessible through the internet. Hot Bitcoin wallets include those free wallets on Bitcoin exchange websites like Coinbase or Kraken and mobile app wallets. 

On the other hand, Cold Bitcoin wallets are not connected to the internet. A cold wallet involves storing Bitcoins offline. We recommend anyone to store their Bitcoin in a cold wallet.

Biggest cryptocurrency exchanges based on 24h volume in the world on August 16, 2021

Buying the Dip

Bitcoin price fluctuations are normal. One Bitcoin can even rise to $60,000 in a day and then drop down to 50% in another day. The rule of this is “buy low, sell high”. Basically, you need to buy Bitcoin at the bottom price and sell Bitcoin at the peak price. It’s all about timing, and you need to time your Bitcoin sales perfectly in order to maximize profits.

Plan your strategy

Before buying Bitcoin, you should have a Bitcoin strategy. For example, you need to have a goal. You need to consider how much profit you are targeting whether it’s a long-term or short-term goal. Do you want to trade your Bitcoin for double profit or triple? What Bitcoin wallet are you going to use? Do you want to use hot, cold, or both? Are you going to invest in other cryptocurrencies? These are some of the important things you need to ask yourself if you want to be a successful crypto trader.

Do your own due diligence to find the best investment strategy that works best for you.

Invest what you can afford to lose

If you’re new to Bitcoin trading, it is recommended that you start trading Bitcoin with small amounts of Bitcoin. This is for you to not have regrets if you lose your money.

One thing to keep in mind is losing Bitcoin is inevitable. You need to accept failure as part of the Bitcoin trade. No one’s perfect, including Bitcoin investors.

The Don’ts

Bitcoin do’s and don’ts

Don’t Trade if you’re not sure

Don’t be impulsive when the Bitcoin price is fluctuating. If you don’t know what to do, it’s best that you don’t trade Bitcoin. It’s better to wait for more Bitcoin information before acting on your own.

Bitcoin transactions are irreversible – if you make a mistake during a transaction there is no going back to fix it!

Don’t put all your eggs in one basket!

You need to explore other options in which you can invest your Bitcoin. This way, if Bitcoin prices drop, you have a chance to recover some of your investment. To be successful in the crypto trading industry, you must spread your money over a variety of assets.

Don’t Trade Without A Stop Loss

Most Bitcoin investors don’t think about putting a stop-loss order on their Bitcoin transactions. A Bitcoin stop-loss is an order that closes your trades when Bitcoin reaches a certain price or hits a specific low point.

Let’s not forget that this year, Bitcoin plunges down at around  $30,000( 50%) since hitting a record high of $64,829 in mid-April.

Having a stop loss will help you with your trading plan. This way you can prevent yourself from losing Bitcoin when its value drops down drastically.

Don’t leave your assets in digital currency exchange

Bitcoin exchanges are vulnerable to hacks and Bitcoin theft. Always withdraw Bitcoin from Bitcoin exchange to your Bitcoin wallet. Your Bitcoin wallet allows you full control over your Bitcoin and is more secure than any Bitcoin exchange.

The Bottom Line

Bitcoin do’s and don’ts

It’s exciting to be part of Bitcoin as it enters the mainstream financial market. However, Bitcoin still has a long way to go in order for Bitcoin users to understand Bitcoin fully. Bitcoin is very risky and also exciting at the same time.

There are still many Bitcoin do’s and don’ts that you need to know before investing in Bitcoin or cryptocurrency for the first time. You should be prepared to lose some money when investing in Bitcoin – regardless of your strategy (short-term or long-term). If this sounds like something you can handle then feel free to join the hype!

Did you know that Tesla no longer accepts Bitcoin payments? Check out the full article here!