News - 6 things you need to know before investing in Bitcoin

By Mike Hesp

6 things you need to know before investing in Bitcoin

If you want to invest in Bitcoin, you need to know what you're doing. Here's how to protect yourself from costly problems.

1. You need a wallet

A wallet is a digital wallet or a digital bank account. It consists of a Private key (only for you) and a public key (for anyone you trade Bitcoin with). At Anycoin Direct, you have the option of sending your Bitcoin to your own external wallet address during purchase, or you can store them in our Anycoin Vault. The Anycoin Vault is a secure ecosystem where your Bitcoins are securely stored by our Anycoin Direct Hodling Services Foundation. Established specifically to store our customers' money, this foundation protects your Bitcoins from third parties while also providing financial security for you, the customer.

Most brokers and exchanges offer their own integrated wallets. However, these are usually so-called hot wallets that can be hacked or otherwise compromised in case of doubt. The Anycoin Vault or a proprietary wallet protects you from such cases.

2. Bitcoin is highly volatile (most of the time)

From an investment perspective, Bitcoin is considered a high-risk asset. This is because the Bitcoin price is sometimes subject to huge fluctuations. This is also known as volatility. In extreme cases, you can invest 1,000 euros one day and the next day your Bitcoin is only worth 500 euros. Two weeks later, it is suddenly worth 2,000 euros - not for cowards!

3. 1 Bitcoin is always worth 1 Bitcoin

This tip is related to the previous point: If you are convinced of Bitcoin's technology and value, don't let prices drive you crazy. Because 1 Bitcoin will always be worth 1 Bitcoin. Realize what that means and make sure you keep your cool when the markets go crazy.

4 It's just a phase

It doesn't matter if the so-called "bulls" drive up prices or the "bears" spread doomsday scenarios: It's just a phase. So far, every high has been followed by a low and every low has been followed by a high. So if you have perseverance, you can usually profit from Bitcoin if you don't get carried away by emotions. At least that was the case in the past.

5. Stay calm and HODL your Bitcoin

The logical consequence of these tips: Try to stay calm. Unless you're a day trader (and you know all this anyway), you're probably on the safe side with a long-term Bitcoin investment. Just buy Bitcoin (regularly) and accumulate it in your wallet. Easy. Well-known trading strategies for this are DCA (Dollar Cost Average) and Market timing..

6. Know when to sell

You can hold your Bitcoin indefinitely, but you'll probably also want to sell (some of) your Bitcoins for a profit at some point. Here's a tip: Before you trade in Bitcoin, determine in advance when you're ready to sell and stick to it! Selling, like buying, can go in stages. If you have 20% profit, be prepared to take out some of your profit. This strategy is called the Step-by-Step Method (Dollar-Cost-Averaging-Out) and is similar to DCA, but works exactly the other way around. This way you avoid losing all your profits again when the bull market is over. Need more tips? Then check out our Exit Strategy blog.

Disclaimer: This text is not investment advice.

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