Bitcoin is still the most popular cryptocurrency in the world, which means there is no way for some other currency to overtake this market position. Still, the crypto market is so unpredictable, and the situation can change at any given moment.
What does it mean for traders?
Depending on different influences (we can’t predict), the Bitcoin price may go up or down, as we try to trade some volume of money. In the recent year, we’ve seen significant price drops, but also the peak value of all times. The appearance of other cryptocurrencies also can change the overall situation, so even the experts may not have the best advice on what to do and how to store your currencies.
These days, Bitcoin’s value is about $23,000, but there were times it was triple that price.
So, is it better to buy, sell, or hold the money?
The decision is up to you because we can’t even predict what would happen until the end of the day. Trying to be smart when working with cryptocurrencies is practically impossible. We face so many challenges, but tools like Immediate Edge are here to ease our life and help us make quicker decisions.
So, if you need some tips on what to do with your Bitcoins, we are here to figure it out with you:
1. Do your research
There is no better advice than this one. You have to explore what’s happening right now in the market and try to be smarter. Understand the technology behind Bitcoin, as well as the current market trends and news that may impact the price.
Also, when you know how Bitcoins work, and what’s their purpose, you’ll easily decide if it’s worth keeping them or sell for fiat currencies or other cryptocurrencies.
2. Create a long-term strategy
Instead of trying to time the market, develop a strategy that aligns with your investment goals. Without a strategy, you won’t be able to accomplish any goals, not even earn some money.
Keep in mind that these days, cryptocurrencies require a lot of attention and dedication, and you can’t be good at it if you don’t have a long-term strategy. That means you have to come up with a few plans on what to do when things go unpredictably bad. Can you find a way out of that situation? Do you have other currencies to work with them, until Bitcoin’s situation gets more stable?
We can’t tell you what is the best option, but you have to plan these things yourself at some point.
3. Diversify your portfolio
Probably you already know that old but good saying: Don’t put all your eggs in one basket. Diversifying your portfolio by investing in other cryptocurrencies and assets can help mitigate risk.
How would it help? If you own more money, you can hold onto their different values. You can exchange Bitcoins for more stable currencies when you see large price fluctuations. You can even research the most stable currencies, and see if you have trading options for them.
Sticking to one currency is not the best decision for you, and we suggest you at least try to diversify your trading portfolio.
4. Use stop-loss orders
What to do when things go worse than planned? Can you automate the whole process, and ease the situation when unpredictable drops happen? Some traders implement stop-loss orders. These orders automatically sell your Bitcoin at a certain price, helping you limit your losses.
Would it be helpful?
In some cases, it may prevent the huge loss, but not every automated process is perfect. So, when something like that happens, let the process happen, but carefully monitor it, so you can act on time.
5. Be prepared for volatility
The price of Bitcoin can be highly volatile, so be prepared for fluctuations and don’t invest more than you can afford to lose.
Many traders aren’t ready for this, which means they think the current prices are forever. That happens when they don’t research the market and aren’t prepared for the real challenges every kind of crypto trading brings. But Bitcoin’s price is so volatile, we can’t even say it’s a safe haven for traders, even though many consider it safe.
Our suggestion is to get ready for a long journey, and never get mad or angry when something changes the price overnight. Surely you would feel nice if the price goes up, but you have to be prepared for those moments when the assets you own lose some of their value.
6. Keep your Bitcoin in a safe place
Consider storing your Bitcoin in a hardware wallet for added security. Use keys to protect the physical wallet, and don’t use them when your computer or device is connected to the internet.
Even though hardware wallets are safe enough, you can’t know what would happen at any given moment. And make sure the wallet is safe all the time, so protect it from damage.
7. Be patient
In crypto trading, patience is the key. Investing in Bitcoin is a long-term commitment, and its value may fluctuate in the short term. Be patient and avoid making impulsive decisions.
Even the best traders sometimes make mistakes, but the key is to learn something from your actions. The easiest way to do that is to be patient with every next decision, and track the results of your actions – because they are measurable and give you a nice insight on what you’ll have to do next time.
As you can see, you can’t do much when it comes to volatility and everyday changes. But, what you can do is to plan the whole process in order to protect yourself from any unwanted outcome. That way, you can say you are a smart trader who knows how to plan their actions and always act according to the given situation.
Be wise, patient, and smarter – and it would become easier to decide if you need to buy more Bitcoins, trade the ones you have, or keep them as saving.