Factors To Consider Before Investing In Bitcoin

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The crypto market has been quite chaotic recently and in less than a month the price of Bitcoin came crashing as low as 35k, a massive decline from its previous 44k. And as usual, it managed to drag the entire market with it. These sudden movement has caused many to shiver, while confusing the newbies as well. Personally, I follow the 50-30-20 rule in which my investments fall under 20percent of my finance to stay sane because the crypto market can be a very crazy place. Everybody knows it is a very volatile place and every decision you make has to be carefully thought of while preparing for the worst. So, here are factors to consider should you dive into Bitcoin.

Number one is timing. The crypto space is all about the right timing. There's a time when you ride the bulls and a time when you avoid the bears. You have to study the market under different time frames to determine when is the best time and position to invest. The Bitcoin chart is an even interesting one because if you study the charts, especially in the last 1 to 2 years, you'll notice the repeated market cycles. So, before you invest, study the time /period the market is currently in for better understanding of when to invest. Notice how long the bulls have lasted, and the same for the bears. Use sites like trading view, coin gecko, coin market cap and the likes to get a bigger grasp of where the market is going at that particular time and period. According to cryptomaniaks, the closer we are from the market's all-time high both in terms of price and time, the least you want to invest.

Number 2, you better have or grow thick skin. Like I said in the beginning, the crypto market is highly volatile, and it would be foolish of you to assume everything would just go fine. It is always better that you stick to investing an amount you can afford to lose. Just like in the 50-30-30 finance rule, it is key that you invest within that 20 percent so other aspects of your finances or life doesn't suffer. And even if you have got balls, try asking yourself how well your balls could handle a loss of $20,000 or even more because it sure can happen. Could losing that amount cause you to have a heart attack or fall into depression? These and many more are questions you need to ask yourself critically before investing any amount into Bitcoin. Sometimes, investing too much might cause you to make bad decisions along the line because you fear loosing it all.

Number 3, you should try investing foolishly occasionally. I know now you probably think I have gone crazy but think of it. If that 20k you invested did x20, that would be a lot of money, and that's why sometimes being too reasonable might not get you where you want. You should be ready to take risks sometimes, like risking that 30k savings or throwing in that 10k because just anything could happen. The folks who made money late in 2017 off Bitcoin didn't make them by being smart and calculated. Some did because they took that huge foolish risk of investing it all while preparing for the worst. What happens to you after is determined by what you do with this profit. So, will you splash it all a limited edition Car, or will you rinse and repeat?