by Rushali 
The world is enjoying the success of cryptocurrencies. Among cryptocurrencies, the most popular one is bitcoin. Bitcoin’s latest bull run fueled by institutional investors has given the much-needed push to the whole world of cryptocurrencies. People were interested in cryptocurrencies but the year 2020 has increased the interest by many folds. This pandemic has done a lot of damage to the whole world.
Every sector of the market is badly affected by this sudden halt in economic activities due to the lockdown. But among them, one of the major affected sectors is the financial sector of the world. Constantly rising inflation and economic recession automatically decrease the purchasing power of the normal currency.
The world was facing all these problems so the demand for digital currency has been rising. Because after all, digital currency is more reliable, available at low cost, and well-structured. And all these features are present in only one thing that is cryptocurrencies. And in cryptocurrency, the widely trusted is only Bitcoin.
But one thing that stops many people from investing in this crypto market is volatility. Not only the crypto market but the kind of investment market is volatile in nature and due to that only many traders can earn money through it. Yes, it is true that bitcoin or any other cryptocurrency is volatile in nature but that doesn’t mean that you will only lose money here.
You can earn money as well if you invest after proper research and study. It is very easy to say that market is very risky or bitcoin is just a bubble that will be busted any time, but if you do proper analysis and research then why will you lose money. That doesn’t mean that the market is not risky, just like any other market the crypto market also has its own risks. So, always invest after proper analysis then you will definitely be successful.
Also Read : Ways to buy Bitcoin
When the topic of investing in bitcoin arises many questions in the mind of people. Questions like how much to invest in bitcoins, what factors to consider before investing etc.
This article will answer all your questions like this. So, let’s start.
There are some factors that you should keep in mind while investing in bitcoin. And before the factors I want you to keep in mind some important and basic points.
1. Never borrow to invest. You should always invest with your own money. If you have a small amount of money then start with that only. If you will borrow money then you will have an obligation to return the amount.
2. Don’t invest more than you can lose. If you can’t afford to lose money then don’t invest that much amount.
Now, let’s move to the main question is how much to invest in bitcoin?
How much to invest in bitcoin?
In the year 2011 the price of bitcoin was around $1 and today it has touched its all-time high of over $61000. If you have bought 5 bitcoins back then, today’s value would have been $3,05,000. So you can imagine the amount of return it has given in 10 years. Investing in bitcoin is one of the most beneficial things. And it is not like that now bitcoin has gained enough and you are late in investing it. The market of cryptocurrency is an evolving market, it will gain more in the coming years.
Many experts believe that bitcoin’s price will grow more in the coming years. Like the CIO of Blocktower capital investment company, Ari Paul believes that bitcoin will give more than 10 times a return in the next two years. Tesla also believes that bitcoin’s price will soon see the six-figures. Not only they just have predicted they that they also have invested a huge amount in bitcoin and they also have plans to accept bitcoin as a payment method for their products.
Tesla is not the only company, in fact, it is one of the companies in the long list of companies investing in bitcoin. Another company is Visa who is also very sure of the bright future of Bitcoin. The company is also developing an API that will reportedly help banks to provide services for buying and selling cryptocurrencies to retail customers. The work is expected to be completed by the end of 2021.
With all these things taking into consideration we can say that bitcoin truly has an amazing future ahead and every time is the right time to invest in this cryptocurrency. The bitcoin market is a buy-on-dip market. There is an investment opportunity on every dip. Even those who have invested at the previous all-time high of $58000 are also in profit today. So you can certainly analyze the price movement of bitcoin.
If you are thinking that how can you invest $58000 in a cryptocurrency then don’t worry you don’t have to buy at least one bitcoin. You can start with only $1. There is no minimum amount or number of bitcoin that you need to buy. You can invest as little and as high an amount you want to invest. So, there is no specific amount for the answer of how much to invest in bitcoin. It completely depends on you and your buying capacity.
Now there are 5 main factors that need to keep in mind before investing in bitcoin. Let’s understand them in detail one by one.
- Risk
The cryptocurrency market is a risky and volatile market. Nobody can predict and guarantee a price movement. Every prediction is based on technical analysis, but it is not certain that prediction and analysis are 100% correct that’s not possible. Just think can somebody has predicted this pandemic, no right then how can we predict that there will not be any other pandemic that will affect the market.
So always invest that much amount only that you can lose completely. Before deciding how much to invest in bitcoin ask yourself will be comfortable losing the whole amount or not? If the answer is yes then only invest that much amount and if you have a 1% of hesitation in losing that amount then don’t do it. Investors who invest too much money are intended to do panic selling because they are not ready to lose all the amount when they see that there is a loss they get panicked and sold it at the wrong levels.
- Profit
Just like there is a risk tolerance level, there is also a profit tolerance level. It is very important for you to set a target of how much profit is enough for you. You cannot think that you will get unlimited profits. If you will get unlimited profit then you will become greedy and will automatically lose your money. If you see for example $10000 profit and you don’t sell and think that it will rise more and when I will get $20000 profit then I will exit, and the price reversed and your $10000 profit also gets erased. So it is always better to have a set target.
Because if you see that you have exited at the wrong time then buy again, but don’t wait beyond your target. In the year 2017, this happened to many investors when the price of bitcoin was skyrocketing. People got greedy and didn’t sell their coins, then the prices crashed as well as their profits. Always invest with a set target. It is a very important factor to think about before deciding how much to invest in bitcoins.
- Time
Investing is all about timing the market. We always hear about the time when bitcoin is gaining and having a bull run, but never hear that it is following the same trend or anything. Because news agency doesn’t provide you with proper research. Before deciding how much to invest in bitcoin you have to research properly. Especially understand the trend that bitcoin follows. Every 1-2 years it has a set trend that repeats. You need to buy at the low then only you will have the maximum profit when you will sell it at high.
You need to find answers to questions like are the prices are on a day’s high, if the bull run is still continuing, etc. You can never earn money if you don’t research properly. So please do proper analysis before entering the market.
- Mind
The human mind is the most complex thing in this whole world. And for investing in cryptocurrency you need to make up your mind. You need to be mentally strong to see losses as well as to control greed. People face this problem of changing their minds a lot. You will an emotional turmoil while investing in a cryptocurrency, so make sure you are already mentally prepared. There is a pro tip to handle your mind. When you decide that ho much amount to invest in bitcoin, divide that amount into 2-3 installments like you should invest your whole amount in 5-6 months.
- Diversification
This is the first thing we learn when we come in the market. Diversification simply means that you should not invest all your money in one investment, diversify your money. Invest in different kinds of assets that help you in managing your losses. If you are facing losses in any one sector at least your any other sector will give you some profits. So, you should always invest some of your money in bonds, shares, etc apart from bitcoin.
These were some of the factors that you should keep in mind while deciding how much to invest in bitcoin.
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