In February 2011, before the entire world knew about cryptocurrency, Bitcoin hit $1 for the first time ever. Since then, it has adopted an up and down graph. But if you compare the price over the last ten years, you'll notice a steady increase in Bitcoin's value. At its peak, Bitcoin has hit over $60,000.
If you had invested in Bitcoin in the early 2010s, you would have a decent return. Now everyone wants to know how to buy bitcoin, and there are many different kinds of cryptocurrencies. Here's what you need to know.
Understand the Risks
In a few months, the value of Bitcoin has almost halved. On April 14, 2021, Bitcoin was valued at $64,000, and it's around $40,00 as of July 30th. The value can go up or down; therefore, if you decide to buy BTC crypto, ensure that it only accounts for a small percentage of your portfolio.
Proceed with caution when investing in crypto for the first time. It offers impressive returns, but it also quickly dips in value, as you may have seen in the last five years. Therefore, you can set aside a certain percentage of your portfolio to buy crypto.
When to Buy Crypto
If you're getting into crypto for quick returns, you're in the wrong investment. The last five years have shown that cryptocurrencies can be volatile. For example, you may be able to buy it today at $50,000 and sell it a week later at $35,000.
Here, you'll need to learn to be patient. Keep in mind that there is no guarantee that if you buy BTC crypto, it will peak again. There is no guarantee, but if it does, you'll make a tidy profit. Invest in crypto because you think it will peak again, and you're willing to hold it for years or even decades. You can buy cryptocurrency anytime, but when you do decide to make the purchase, keep a long-term outlook.
How to Buy Bitcoin
Before you buy BTC crypto, be sure to consult your financial advisor. They have more than likely encountered or transacted in crypto; thus, they will have a better understanding of the cryptocurrencies. You can use a crypto exchange to buy or sell any cryptocurrency. A common buying strategy is the dollar-cost averaging, which allows you to invest in crypto gradually over an extended period. For example, you can opt to buy BTC cryptocurrency every day, week, or even month for a year, two, or more. If you choose this strategy, ensure that the dollar amount invested in every purchase is the same. Don't get greedy when the price starts going down.
Keep these tips in mind when looking to buy bitcoin for the first time.