However, starting in 2020, the price started suddenly increasing due to many factors, the Covid-19 pandemic being the major one. In January 2021, the BTC price reached $40k+. Now more than ever, people are considering investing in Bitcoin, but many also have doubts.
To answer the topic question: yes, Bitcoin is more popular than ever. However, the right question to ask is — should you invest in it?
Prepare Yourself Mentally for Ups and Downs
Bitcoin is a volatile currency. It means that its price changes on a daily basis and you have to be mentally prepared that your investment might not turn out as lucrative as you initially thought.
In other words, the best approach is to prepare for ups and downs upfront and don’t think of every price change as definitive. That’s why some Bitcoin owners prefer the popular “hodl” strategy. Instead of following the market, they just buy BTC and forget about it, hoping they would be able to sell it later for a better price.
Cryptocurrency Investment is Risky — But Also Rewarding
Compared to other types of investing, cryptocurrencies are risky. Many professional investors consider them equal to gambling, as the chances to lose your money are pretty big.
Like many gambling games, bigger risks sometimes yield bigger rewards, meaning you can increase your initial investment by a lot if the price of Bitcoin starts going up rapidly (as it has done several times so far).
Learn How to Protect Your Bitcoin Wealth
Another important topic to think about is how to protect your Bitcoin wealth once you invest in it.
Bitcoin is stored in cryptocurrency wallets, and each wallet has a unique private and public key. The private key is used as a password to access the wallet. This is something only you should know. On the other hand, a public address is similar to an email address, except that you send and receive Bitcoin instead of mail.
Wallets are divided into hot and cold wallets. The hot ones are pieces of software that you can install to your PC or mobile device and access your funds on them.
The cold wallet is a piece of hardware that you can buy, store your BTC on, and then disconnect it from the web. Cold storage is widely regarded as more secure than its hot counterpart.
Consider Alternatives
Even though Bitcoin is the most popular cryptocurrency, it definitely isn’t the only one. There are plenty of other cryptos worth taking into account, including Ethereum, Litecoin, Bitcoin Cash, Ripple, EOS, and more. Make sure to keep an eye on how all of these cryptos trade to create the best possible investment strategy that could bring long-term profit.
Final Thoughts
Investing in Bitcoin is an entertaining and exciting activity, but it also comes with big risk, especially if you have no prior experience with cryptocurrency investment and trading. Therefore, before making your first move, make sure to learn more about the entire industry and the history of BTC price.
Finally, you should accept that Bitcoin is volatile and investing in it is a double-edged sword. In other words, the element of chance plays a huge role, which makes buying BTC a gamble.
