Bitcoin investors have had a relatively great experience with the cryptocurrency over the past weeks.
At some point, the digital currency was trading at about $50K – which accounts for the highest point that has been achieved in months. The same event comes hot in the heels of significant corporate support that has gone a long way to create some sense of legitimacy in the eyes of people looking to bet their money on Bitcoin.
Indeed, the latest occurrences have been marked by the rise in potential investors wondering about the right opportunity for them to invest in Bitcoin. Against these backgrounds, you may also be contemplating Bitcoin investment – but, it this the right time to buy the virtual coin?
The general rule would be to use a journey of self-discovery to understand your motivation to buy Bitcoin. Considering the highly volatile nature of Bitcoin, below are the important points to remember.
Resist FOMO
The fear of missing out, which is colloquially referred to as FOMO, refers to the anxiety that people experience when exciting opportunities are seemingly being enjoyed elsewhere – FOMO is usually triggered by media attention and social media conversations.
Cryptocurrency FOMO has become a common issue in light of the long list of success stories being shared about people that have made millions overnight from Bitcoin investments. The anxiety has driven many people to fall into the pit of social bias, which influences them to follow influencer steps when investing in Bitcoin.
The thinking about “safety in numbers” is also something that propagates FOMO among people that are led to believe that they cannot lose money based on the large number of crypto investors in existence.
In reality, FOMO is a fallacious mistake that will lead an investor to invest in ICO (Initial Coin Offering) frauds, or panic sell when Bitcoin drops ion value. The emotional aspect of FOMO will misguide your decision-making process of choosing to buy and hold Bitcoin.
Invest What You Can Afford To Lose
While the real value of stock investments can be predicted and tracked using metrics such as price-earnings ratio, cryptocurrencies are notorious for throwing investors in the dark. A lot of confusion is attributed to the minimal availability of credible information about Bitcoin valuation.
In addition, not many people can confirm that they have a good grip of how crypto is bought and sold, or even how Bitcoin is affected by taxation.
Therefore, it goes without saying that the best way to cushion yourself from severe disappointment is to invest money that you could afford to lose.
Do Not Count On the “Bitcoin Bubble”
For more than a century, the stock market and other forms of traditional markets have become pivotal to wealth creation across countries. Although they may have hurt a number of investor funds along the way, there is no denying that they are a “tried and tested” option for people looking build wealth.
The entry of cryptocurrencies caused a shift in how people do business from about a decade ago. Emergence of Bitcoin provided an opportunity for investors to cash from once-in-a-lifetime gains.
Consequently, talks about the Bitcoin bubble – denoting the assumption that its price exceeds its real value to a large extent – started arising. The fact that a number of professional investors have dismissed Bitcoin as a bubble may point to some truth about the real value of the digital coin.
Hence, any investor looking to make money from Bitcoin must avoid invest in Bitcoin with the idea of exiting just in time before the bubble bursts. By so doing, they will be joining the bandwagon of several other like-minded people that are endangering their investments on the basis of pure speculation
