Thinking of buying your first bitcoin? Don’t jump into it blindly. Over the years, investors interest in BTC has exploded as trades are more than ten times where they were a year ago. Thousands of people are opening accounts at crypto exchanges and trading cryptocurrencies every day. If you are planning to join the crypto world, here are hacks you should know.
1. Don’t buy a full BTC
As a new investor, you might miss the concept that you can buy bitcoin in a fractional amount. You don’t have to purchase a full one. This crypto is very divisible and may go down to seven or eight decimal places.
In simple terms, you can purchase the coin in increments of a hundred-millionth of the entire coin. These tiny units are referred to as a ‘Satoshi’ after the creator of the coin. Trading exchanges include minimum trade amounts which is usually in the range $5 to $ 10 and not $60,000-ish price label of a full coin.
2. Use strong passwords
Although cryptocurrency exchanges are secure and they prioritize on avoiding breaches, its wise to use strong passwords. The coin nay be held in cold storage which means it won’t be connected to the internet but there will be nothing to protect if your account is hacked.
Cryptocurrencies are prone to large scale theft that’s why exchanges take the extra precaution to install tight security measures to protect your funds. However, if you use an accessible password and someone uses it to authenticate transactions, you can’t get your funds back. Once the crypto is transferred from your account it’s gone that’s why you need strong passwords to safeguard your account.
3. You can store the coin in a cryptocurrency wallet
Still on the issue of security, you don’t have to leave the purchased coin where you bought it. Though this is an option to many, you don’t have to do it if you have doubts. You have an option of storing the coin in a cryptocurrency wallet.
A wallet offers varying degrees of protection. You may use a hardware wallet which is a special hard drive that is not connected to the internet so you store your BTC completely offline. However, such a precaution may not be necessary for casual buyers. But if you are buying in thousands of dollars, this is a smart move.
4. Have a trading strategy
Don’t buy cryptocurrencies without a trading strategy. Not everyone offering trading tips have your best interest at heart. So avoid making the mistake others are making. Be clear on the amount you are willing to invest.
Cryptocurrency trading is a risky business where more traders lose. Set limits on the amount you wish to invest and don’t be tempted to invest more than you can afford to lose.
In addition, ensure the payment method is safe and secure. There are numerous payment methods but go for the most secure. You can opt to buy bitcoin with debit card as its not only safe and easy but also has swift transactions. Besides, Coingate allows you to buy gift cards with cryptocurrencies to gift a loved one. Even better, buying gift cards has been made easy with the easy to navigate features.
5. Diversify your portfolio
Don’t invest all your money on a single digital coin. Just like with shares and stocks, spread your money in other cryptocurrencies so you avoid the risk of being over-exposed in case one plummets in value. Buy cryptocurrencies whose market price are less volatile and do thorough research so you can diversify your portfolio.
6. Decide between trading and investing
While trading means buying the coin because you think the value will increase quickly and you make a quick profit, investing is the act of buying and holding the digital currency for a long period. Investing would be perfect as a supplement to a diversified portfolio but trading needs extreme caution.
Timing the price of an investment is not easy. Besides, buying and selling the coin is not free. It includes transaction fees which add up if you have numerous transactions. That’s why you need to take extra caution as the charges are expenses which may lead to huge losses.