9 Useful Tips To Manage Your Bitcoin

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The internet has lots of success stories about ‘Bitcoin millionaires,’ so it is expected to motivate some enthusiastic investors who wish to try their luck with this recently popular cryptocurrency. But before you empty your bank accounts to invest in this digital market, keep some of these handy tips in mind to ensure safe investments.

Be informed Before Starting

The saying goes, “Know thyself, know thy enemy.” This is quite applicable in the bitcoin world. The majority of the people are not well-informed about cryptocurrency or how to invest in it. The key to making a profit with bitcoin lies in how knowledgeable you are about it and whether you can apply tactics to your benefit.

If you are looking for a starting point, experts recommend the original 2008 Satoshi Nakamoto’s paper. This is an 8-page long genius guideline that gives a clear explanation about Bitcoin.

Investing is generally a risky task but going in blindfolded is the worst thing that you can do. Investors should have a clear understanding of blockchain and the ledger system of digital currencies.

Bitcoin technology can be quite overwhelming for beginners, so it is a good idea to take help from a trusted mentor or resources so that you can invest safely.

A common term that you might have heard regarding Bitcoin is the Bitcoin trader. It is imperative that you learn about this aspect as well if you intend to start Bitcoin investment.

Stay Cautious

Though investment has always been synonymous with risk, cryptocurrency is even riskier because it is still in the early stages, and so is less developed compared to stock or bond markets.

Beginners should invest a small amount and evaluate the risk-benefit ratio; don’t invest money which you cannot afford to lose. Remember to select one entry price and wait for it to reach the right price and avoid buying Bitcoin all at once. Instead, invest in small quantities at a time.

Regularly Check the Market Cap

The obsession with coin price is a common rookie mistake. This is why this issue is emphasized again. The validity of cryptocurrency depends on the current circulating supply. If you want to make a profit, sell the coins when the cryptocurrency is closer to the market cap.

The Truth about Bitcoin Mining

In the beginning, from solving cryptographic puzzles to earning new bitcoins, all could be done using your home computer. However, nowadays, the only way to mine for Bitcoins is by specialized data centers, which can cost millions to set up. Thus, it is more economical to invest in bitcoin that is already in circulation.

The Importance of Diversification

The first and foremost advice before you start investing is not to put all your eggs in one basket. Instead, aim for a diverse portfolio by including Altcoins, bonds, and stocks.

The aim of this is to keep multiple doors open for profit. If there is a decrease in one asset, there will be a corresponding gain in another. For example, if one of your digital cryptocurrency falls by 5%, there will be an equal gain in another component. This way, even if your Bitcoin price fell to $0, you could use your Altcoins to invest.

Store Bitcoin in Your Wallet

Cryptocurrency doesn’t have a physical form, and that applies to Bitcoins as well. Most Bitcoins are bought on exchanges. However, they are not a safe storage place. There have been numerous cases of hacking; a safer way is to use a Bitcoin wallet.

When you make a wallet, make sure to have a backup in order to recover it in case of unauthorized access to your computer. Furthermore, backing up is not enough. Make sure you encrypt your backup. Also, make sure to update your backup regularly to include all the recent address changes in your bitcoin.

A rule of thumb when using a Bitcoin wallet is to store a small amount of money, enough for daily use. This is done as a precaution against hacking and losing all your money at once.

Moreover, make sure to spend some time to decide on a strong password that is at least 16 characters long and has a mixture of letters, numbers, and punctuation marks. Remember your password at all times, or you risk losing all your funds. This goes without saying that you refrain from sharing your private key.

If you are still not confident about the Bitcoin wallet, you can choose watch-only wallets to view your balance or use a cold wallet (offline wallet) to refrain from spending or for security.

Expect the Unexpected

Price fluctuations are a staple of the investment world. This is even more marked in Bitcoin and other digital currencies.

The way to counteract and prepare for this volatility is to attempt diversification, which has already been covered earlier. Another great way is to buy and hold onto your digital assets. Passive investing has been proven to be more profitable to active strategies in the long term. It also requires less operating fees and is less stressful to manage.

Track Your Bitcoin Investments

Tracking your investments is an essential task for any investor. Fortunately, there are many tracking apps that can make this easier for you. Here are some useful apps that you can check out:

  • Altpocket
  • Blockfolio
  • Coin Tracking
  • Mint (It can track all your cryptocurrency investments all in one place.)

Make sure to research the pros and cons of each app to find the one that is most suitable for you.

Remain Updated about Bitcoin News

Bitcoin is an ever-changing asset, and you should stay updated about all the changes made about it. The Age of Cryptocurrency by Michael Casey and Paul Vigna is a great book to get into the world of Bitcoin. Other useful resources include:

  • Opinions of the Rich and Famous on Bitcoin
  • Research Library – papers from companies and academics
  • r/bitcoin – Bitcoin links and discussion by the Reddit community
  • @Bitcoin – The hub of the Bitcoin Twitter community
  • MWC – Learn something new like Mimble Wimble for scalability, privacy, anonymity, and fungibility.
  • Bitcoin Charts – price charts
  • Bitcoin Knowledge Podcast – Interviews with top people in the Bitcoin world

Conclusion

The world of Bitcoin may be volatile and risky, but it also has its perks. Moreover, any investment is a risky business, but if you are prepared and make smart decisions, you will be able to minimize losses. Stay informed and updated, invest a little at a time and sell at the right time, secure your bitcoin with wallets, and practice caution not paranoia.

This way, you  can comfortably make a decent profit even if you are a beginner. Patience and identifying opportunities are key with cryptocurrency, so keep them in mind before starting. Good luck!

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Hi I'm Waleed Tariq, the founder of Mind My Business NYC and author of this blog. I am an entrepreneur and internet marketer. My wish is that, this website helps you to grow your business and achieve your goals.

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