Trading Bitcoin? Follow These Rules to Maximise Your Income

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1. Breaking Down Bitcoin

Breaking down Bitcoin

Bitcoin is a type of cryptocurrency. Actually, it is the first ever cryptocurrency in the crypto world that started its journey which has later become the mother of all the altcoins. Bitcoin is one of the first digital currencies to use peer-to-peer technology to help start investments in the crypto world. There is a ‘protracted debate’ on identifying Bitcoin as a product or currency. So, here’s a calculation put into words to estimate the value of Bitcoin in the industry.

Ethereum has been the talk of the town throughout 2017. It has seen as many as 71 per cent of growth and launch of ICOs. Also, Ethereum saw a huge rise of $1400 from the meagre amount of $8; all in one year of time. This has resulted in a claim that Bitcoin is decreasing its value. Please don’t fall for these claims.

Bitcoin works an efficient method of transacting funds, with a high-end guarantee to make it more secure than paper money, debit and credit cards, and online transactions. Bitcoin is controlled by a decentralised network with a transparent set of rules. Investors and companies, who participate in the Bitcoin network, are known as miners. When new Bitcoin is being released for the miners the rate is always fixed but has a periodically declining rate.

Bitcoin mining is the process through which the currency is released and set free to circulate in the market. Bitcoin mining is a difficult computational puzzle that each time open up for a new block in the blockchain. Basically, miners start receiving a reward in form of Bitcoin when they come into the transaction.

In 2009, the total block reward was 50 new Bitcoin among the total miners. Eight years down the online, it has decreased in 12.5. The mining difficulty began at 1.0 with Bitcoin’s debut back in 2009; at the end of the year, it was only 1.18. As of April 2017, the mining difficulty is over 4.24 billion.

All these make the total supply of Bitcoin up to 21 million in the industry. One unit of Bitcoin is divisible to eight decimal places, which makes it 100 millionths of one Bitcoin. The smallest unit of Bitcoin is referred to as a Satoshi. Also, the industry buzz is if need be, and participating miners agree to, Bitcoin would eventually be made divisible to even more decimal places.

So what’s the total worth of Bitcoin? In 2017, biotin has seen a rise of almost $ 1000. By the end of the year, it became $ 19, 000, with a high of $ 1400 in the pocket.

2. Play your cards in an unfailing way

Play your cards in an unfailing way

This being the scenario, where Bitcoin has only seen a whopping rise since inception, investors need to swear by some rules to stand still in this volatile market. ICOs and crypto platforms are extremely fluctuating, but these following thumb rules to help mitigate the losses and maximize profits.

Cryptocurrency is a brilliant way of making money. While there remains a saying in the crypto world that if you are trading in cryptocurrency, the world is free of boundaries with an open market that is 24* 7 open. You can stop working totally, stop going to the office and only invest your money and live by with the profits. However, keeping the underlying factors in mind it is not as easy as it seems. At this point, an alarm should ring in your mind.

3. Only invest that amount you can afford to lose

Only invest that amount you can afford to lose

Bitcoin, as well as altcoins,  have several underlying factors that one needs to consider before investing. While in all these years, Bitcoin has been the most successful currency, mainly because of its wide acceptance. At times, one may feel that in the dark web, Bitcoin is larger than USD.

In 2017, as Ethereum has seen a huge growth, investors of Bitcoin were reported with frustration and losses. Keeping this in mind, invest the amount of money that you can afford to lose. Once you have invested your money into cryptocurrency, consider that as totally gone. There is no guarantee that you would receive some sort of profit, or even get the money back.

Fluctuated market, external factors such as government regulation, bans, hacks, and bugs can ensure it anytime that you will never get to see your money again. So before you set a sail, make a little calculation. Know the rule of the rules. Re-evaluate your current financial situation. Make sure you have counted in all your loans, mortgages, and credit and debit cards balance before you act desperate.

4. Never put all your money into one

Never put all your money into one

As an old saying goes, never put all your eggs in one place, follow this when you want to invest in Bitcoin. While there is always the chance you would get more profit if you invest more, but you cannot deny the risk factors the investment may face.

So think this way- see the cryptocurrency market as a whole, and see if you can foresee the growth. With the present scenario, it’s more likely that the industry will increase. And by 2020, most of the countries in the world will transfer a large amount of economy into cryptocurrency.

But what if it does not? If you follow investing trends of miners and go through blogs that are written for making people understand the piece of information of cryptocurrency, you would see that investing on different coins would lower the chances of loss.

Let’s share some facts here- in the last couple of years Corgicoin has increased by 60,000 times, while Verge has seen a growth 13000 times. You can see what Ethereum has done in the first paragraph of this article. Coming back to Bitcoin, in this span of time, Bitcoin has seen a growth of only 34 times. Do we need to say more? Invest as you see it.

5. Invest Only When You are Fully Informed

Invest Only When You are Fully Informed

Never fall for advertisements those are claiming to hold back your investment through all the turbulence. If you want to act as a responsible investor, do your research. Due to the highly speculative nature of the cryptocurrency markets, information coming from the best of investors is only good, not best. So decide your capacity and don’t get burned.

6. Liquidity

Liquidity

In the crypto world, liquidity is the asset. It decides the volume of an asset in the industry. Liquidity refers to money that is not invested for long-term and can be withdrawn and put back into investing any time the client wants to. The more the liquidity, it’s easier for the miners and users to buy and sell.

Bitcoin is a volatile platform. So when you keep your added income in mind, follow the trends.

7. Know your Market

Know your Market

If you are a first-time investor and know nothing but the fancy facts of cryptocurrency and crypto world, please spare a minute to think. You have no clue how the market runs. Read a lot about the market rules. Read, and watch as much as you can about investing in Bitcoin.

Also, take a look at the prime miners; what are the types of users there in the market, how people use cryptocurrency and what they spend their coin for. It would help you estimate the future value of the investment.

8. Networking

Networking

You will never go wrong with networking if you are likely to spend your money investing on Bitcoin. There’s the famous saying that likeminded people think alike. In order to understand what your group of people are thinking about Bitcoin and cryptocurrency, you should go networking.

It would facilitate you to an access to valuable inside information. You can get more profitable trading hacks by networking. Networking is just the way of becoming the industry leader while you are in conversation with other leaders.

Always go for meetup.com or social media platforms and the groups inside to get in touch with people interested in Bitcoin.

9. Have an Entry and Exit PlanHave an Entry and Exit Plan

 

There is no such rule to define perfect entry and exit plans. But if you are able to calculate the risks and profits out of it, plan a strategic decision-making process. Do not start investing your money if you see everyone else is doing the same. No other investor will pay you their share if you lose. Not every occasion is a good time to invest all your money. Stick to your investment parameters.

10. Have Patience

Have Patience

If you are investing for the first time in the crypto industry, or you are an experienced soul, hold your patience as you invest your funds. If you have already chalked out an investment plan for yourself and noted the strategies you are going to follow, have the patience to follow that with a whole heart.

In the crypto world, when you invest in Bitcoin, you are not going to see the profits overnight. The crypto world is open 24*7*365. This may work as a boon or a curse. One fine morning you may get the news of the crypto ban, or receive profits of the amount you never thought of. Either way, hold your breath and follow the strategy you have started with.

With this, if you are desperate to invest in Bitcoin, get rid of your emotions. The crypto market is volatile and cruel and you may lose everything that you have invested. No point shedding tears now. We are not saying to refrain from earning or profiting more, but certainly you should learn from your mistakes.

Control your hunger for profit. It is easy to go with the flow when you get to see more profits come up, just hold on for a minute and calculate the risk factor as well. Definitely, you do not need to gamble with your money, right?

Understand blockchain before you invest. Don’t worry, you don’t have to go through all the technicalities of cryptocurrencies. But by paying a little time on understanding what blockchain is, you would definitely understand secure transactions.

As we have said earlier, volatility is the spice of crypto world. Volatility brings in the profit while it also blurs your trading vision. Also, spend some time to understand other altcoins. Those are the competitors of altcoins. Understanding if they’re growing or decreasing in popularity may help you predict future Bitcoin price movements.

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