Advice For New Bitcoin Investors

As we all know, if you had invested in Bitcoin five years ago, you would be a millionaire by now. If you invested during the great surge of December 2017, when Bitcoin reached heights of nearly $20,000 sending the rest of the market (and the world) into a bullish frenzy, then you would most likely be broke by now. Either that or heartbroken that your investments did quite literally the opposite of what you wanted.

On the other hand, if you were hesitant about investing in Bitcoin before then you have probably given up all hope on that idea now. The cryptocurrency is currently trading just above the $4,000 key resistance level and after the past few weeks, it’s good to see Bitcoin above $3,500.

For those investors which are looking for signs to know how to look forward then they will most likely find themselves a bit confused. The United States Justice Department is investigating whether last year’s rally was the result of manipulation in the market. On the other side of things, Nasdaq is planning to launch Bitcoin futures sometime in the first quarter of next year.

The hard facts are that any investor in Bitcoin needs to be prepared for the potential outcome that they could lose everything they’ve put into the leading cryptocurrency. The founder and executive chairmen of Edelman Financial Services, Ric Edelman shares the same view and stated:

“You need to invest with two attitudes: that you’re going to hold it for years, even decades and that volatility is an inherent element of the asset.”

Since the first of January 2018, Bitcoin is down just under 70 percent. According to a professor at Duke’s Business in North Carolina, Campell R. Harvey, if you look at Bitcoin’s worst day, then this is the equivalent to a 4,000 point plunge in the Dow Jones Industrial Average.

The professor has also compared the highs and lows of Bitcoin with more mainstream investments too. This includes the USD and gold and the volatility of Bitcoin is more than 80 percent more than that of the two aforementioned assets.

The bottom line is, is that you shouldn’t put money into digital currencies with the dream that your returns will be the same as those who invested in 2011 for example.

What are your thoughts? Let us know what you think down below in the comments!