How to Invest in Bitcoin

How to invest in Bitcoin - My cryptocurrency investment strategy.Have you wondered how to invest in Bitcoin? I started out wide-eyed and full of excitement, trying to buy the valleys and sell the peaks. My Bitcoin investment strategy has changed quite a bit over time. Fortunately, the overall upward trend of Bitcoin has been more than forgiving of my early mistakes. These days I’m more of a steady hand in my investment strategy. Grab a cup of coffee while I explain the strategy that seems to work best for me. Bear in mind that I’m constantly re-evaluating my cryptocurrency investment strategies. I also invest in altcoins in an effort to create a diversified portfolio.

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DISCLAIMER: I am not a financial advisor. The information presented is based strictly on my own beliefs and experience. Cryptocurrency markets are new and evolving technology, thus you are advised to do your own due diligence. I recommend you never invest money you are not willing to lose due to the speculative nature of cryptocurrencies. If in doubt, please contact your financial advisor.

Where to Buy Bitcoin, Ethereum and Litecoin (BTC, ETH & LTC)

I recommend to everyone that they begin at Coinbase.com. Why? It is a United States based company that insures investors against losses if their system is hacked and you lose deposited funds through no fault of your own. Their interface is incredibly simple to use. You can buy cryptocurrency easily using your linked bank account or credit card. They will even give you $10 free Bitcoin when you open a new account and fund it with at least $100.

Where to Buy Other Altcoins

There has been a great deal of speculation that as the cost of Bitcoin, Ethereum and Litecoin go up, altcoins will draw more attention from most investors due to the lower buy-in costs. While the majority of my personal investments are in BTC, ETH and LTC, I think there may be something to this theory. Unfortunately, we can’t buy most of the altcoins on Coinbase. Fortunately, there are other reputable cryptocurrency exchanges where you can buy the lower-priced crypto coins. The first is Binance.com where you can purchase many altcoins. They have built a reputation for being safe and stable. This is the only exchange in my list of trusted exchanges where you can buy the popular IOTA altcoins. The other exchange for altcoins is Bittrex.com, another highly trusted and stable crypto exchange site.

Dollar Cost Averaging Cryptocurrency Investment Strategy

Bitcoin prices have steadily increasedBitcoin prices have made headlines on nearly a daily basis during the past few months. Mainstream firms are eyeing the huge upside potential of cryptocurrency as profits soar beyond anything previously seen. Yet, Bitcoin, as well as other cryptocurrencies, is highly volatile. Many people adopt the buy low, sell high strategy. That’s what I did at first, but I found a better strategy – at least for me. My cryptocurrency investment strategy is dollar cost averaging.

The problem I ran into was that I would buy Bitcoin at a low point. Then the price would run up and I’d sell. Then I’m sitting here with all this cash but the price kept going up, up and up! If you take a look at Bitcoin charts you’ll see that dips in price don’t tend to last very long. I have a real life so I can’t sit at the computer all day monitoring price swings, so I would miss those infrequent buying opportunities. Several times I had to eat a loss in order to buy back in because the only thing worse than losing money on a Bitcoin trade is not being in the game at all.

Dollar cost averaging allows regular investors, like you and me, to invest on a regular basis, while providing some protection against fluctuations and downside risk. Using dollar cost averaging, I buy $100 USD each Monday. The reason I buy on Mondays is that statistically, this seems to be the best day to buy at the lowest overall prices. On the days when the price is up I end up with less purchasing power, so I get less Bitcoin. On the days when prices are down I end up getting more Bitcoin — but my purchase amount is always the same regardless.

The dollar cost averaging approach removes a lot of the emotion from investing decisions and helps me remain focused on my long-term strategy. I’m not so concerned with ups and downs in the market because I believe in the long-term success of cryptocurrencies, and Bitcoin in particular. Now, if you don’t believe in the long-term success of cryptocurrency then you will probably want to consider alternative investment strategies such as buy low, sell high.

Check out my selected cryptocurrency investment resources.

Bitcoin investment points to remember:

  • Dollar cost averaging for cryptocurrency investing is best suited for long-term holdings.
  • This approach makes sense for highly volatile investments such as Bitcoin.
  • Cryptocurrency is a new technology and should be considered highly speculative in nature.
  • No strategy can remove the inherent risks involved so do your own due diligence prior to investing.

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