In the recent few years, few technological innovations have received quite the amount of attention as investing in Bitcoins. Essentially a self-regulating form of money, Bitcoin is best known for increasing in value many thousands of times over in the space of a few years, turning many of its owners into millionaires. Unfortunately, Bitcoins is also known for its volatility. If you’re interested in investing in Bitcoins, then here are just a few tips to avoid the boom and bust nature of the currency.
When Bitcoins first started getting attention on a few tech blogs, the rumor was that it would never amount to much as a currency. Its utility seemed limited, with only a handful of companies were accepting Bitcoins as payment; a pizza place started accepting bitcoins and then was famous at the time for being one of the only services using the currency.
After the initial crash in its price, Bitcoins pushed its price to the point where its owners found themselves with a currency that was many thousands of times more valuable than when they had purchased it. A small purchase could lead to hundreds of thousands of dollars’ worth of the currency. For example, one man found that his $27 worth of Bitcoin had expanded to over $800,000 in value, and now with its price at around 700$, market analysts are expecting the price to reach 2,000$ in 2017.
The biggest draw of Bitcoins is its independence from the mainstream. It is easy to use and essentially powered by the internet, rather than by a few Wall Street bankers, however, this means that Bitcoins’ value will increase relative to its usefulness in internet transactions only, rather than global supply and demand, technical or fundamental analysis.
The largest mistake early investors made when Bitcoins first crashed was selling off their supply of coins in a panic. Had they kept onto their supply of the currency for another year or two, their profits would have been extraordinary. Creating an exit price that you want to be achieved is a good way to meet your goal rather than run at the first sign of a drop in price. This last point without any exaggeration, the concept of “buy low, sell high” may be appealing in the world of Bitcoins, but you may find that like many others a longer wait will pay off in much bigger rewards.
For these reasons, investing in Bitcoins rather than treating it as a gamble can make a conservative play a huge payoff; patience is a must. For many, Bitcoins investing is a positive and might be life-altering experience.