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• Rationality beats impulsive action
• Enjoy Bitcoin without buying it directly
• Bitcoin is not over yet on Zenith
Know the risks and avoid common mistakes
In 2019, Bitcoin investors spent an annual maximum of $ 12,159 per digital coin.
But before an investor enters the cryptocurrency business, it is necessary to understand that bitcoin is much more volatile on the market than established financial instruments.
That's why the top priority is to stay calm and control your emotions. Anyone who already owns Bitcoin should of course keep it at rising prices and not buy irrational units. Because prices are rising rapidly, there is always a risk of investment bubbles that correct the price in a short time, as soon as they burst. Here, you risk losing a lot of capital in no time. Another maxim is that only private capital should be exchanged: it is against any investor to discourage borrowing for the purchase of cryptographic currencies, because even in this case, the risks of financial bankruptcy increase.
Long position against short position
As with all markets, it is essential to respect and estimate the right timing before proceeding with each purchase. If the investor expects the price to rise, he must take a long position. So buy bitcoin and hold it at the desired price, then sell it later with a profit, the "margin". Continued consideration of the market is a prerequisite.
If the investor takes the short position, he is betting against Bitcoin, that is, he suspects a fall in prices. – Bitcoin trading with Plus 500 – that's how it works. 76.4% of retail CFD accounts lose money. – According to this method, the investor borrows a certain amount of cryptocurrency and sells it immediately. If prices fall as expected, the same amount will be redeemed and returned to the beneficial owner. The difference between the initial selling price and the subsequent purchase gives the margin for the short position.
The "Bitcoin pension scheme"
Another variant established is the average cost effect, which is the average cost effect, considered the most constant and least stressful method because the emotionally controlled actions are not significant. Investors regularly invest a certain amount and, depending on the price, they receive more or less shares of cryptocurrency. The average price is therefore intended to correct the volatility of bitcoin and accumulate long-term cryptocurrency until the desired selling price is reached.
Alternative opportunities to profit from the boom
An investor can also benefit indirectly from the rise of Bitcoin, as the price of Bitcoin increases, so that the Bitcoin group's share price should also increase. The Bitcoin Group is currently the only German company offering cryptocurrencies on a regulated market. Similarly, the NVIDIA graphics card manufacturer's share is behaving, because for production, so the so-called cryptocurrency extraction, a very high computing power is needed, which is why the need for graphics chips during Bitcoin flight at high altitude is increasing exponentially. Another advantage of sharing NVIDIA is that it is irrelevant that the cryptocurrency is booming, because the encryption of all crypto-currencies requires powerful computers. The same goes for the Intel processor maker, whose chips are essential for digging the digital currency.
Bitcoin becomes more serious
The bitcoin trade continues to evolve. As cryptocurrency becomes more relevant, politicians and regulators are increasingly turning to cryptocurrency to contain future price manipulation via control mechanisms. This would make Bitcoin a legitimate financial instrument accepted by the public.
In order not to miss the opportunities of the cryptography market, the big banks are already forced to launch their own digital currencies and, conversely, the demand for crypto-currencies of origin can increase. JP Morgan Chase is a pioneer in the banking industry in this regard and Facebook is a pioneer of Libra in social media regarding alternative payment options with its own cryptocurrency.
This text is provided for informational purposes only and does not constitute an investment recommendation. Finanzen.net GmbH excludes all recourse.
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