Is It a Good Time to Invest in Bitcoin in 2018?
Let’s start with the answer! You can even skip everything below this lead but then you’ll miss a lot of cool analysis. So, yes, it’s a good time to invest in Bitcoin. What is more, it’s a good time not only in 2018 but almost always. The thing is that there are different strategies for investing including long-term and short-term ones.
So, this article is for everybody who hasn’t decided yet.
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Is It a Good Time to Invest in Bitcoin in 2018?
Bitcoin highs and lows
Bitcoin nearly reached $20,000 per coin in the mid-December, 2017. That was a record high. A month later Bitcoin was about $11,500 and continued to fall. It hit the short-term bottom of $6,620 on April 6. It’s pretty big loss, isn’t it?
But now Bitcoin is growing again. According to the Cointelegraph analysis, the main cryptocurrency in the world consolidates near $9,200. Experts claim that in a medium timeframe Bitcoin will be fluctuating between $6,000 and $12,000 depending on the market trends and government regulations. Within this range, the currency will be extremely volatile. However, it’s possible to exploit this and get high ROI.
According to Jordan Hiscott, a trader at Ayondo, the main reason for the Bitcoin volatility right now is Mt. Gox. Its trustee, Nobuaki Kobayashi, has already sold coins for $400 million. Such enormous sale alarmed other investors which might have contributed to the massive Bitcoin fall in winter.
Other reasons for the Bitcoin price fluctuation may relate to:
- Governmental regulations. The brightest example is China where mining, ICOs and crypto-related web-sites are prohibited. Major players like the USA and European Union also want to regulate cryptocurrencies or make them less anonymous.
- Social networks and marketing. The internet and social media news influence traders’ opinions and behavior. For instance, blocking crypto-related ads on Facebook led to Bitcoin falls in February. The hotter the news is, the more it affects cryptocurrencies.
- The infancy of cryptocurrency. Current fluctuations follow the enormous growth of cryptocurrencies in November, 2017. It’s a regular trend for all fresh markets. Similarly to dotcoms in 2000s, cryptocurrencies should survive and get rid of speculators and fraudsters.
Why do we provide all those figures and stats? Well, the title is the key. 2017 was the year of Bitcoin but nobody knows how the wind will blow in 2018. It’s only up to you to decide whether to invest in Bitcoin or not.
Why do people invest in Bitcoin and other cryptocurrencies?
There are several reasons why investors choose cryptocurrencies nowadays:
- They want to get a higher net worth. Fiat currencies of various countries suffer from inflation. That’s why cryptocurrencies look like a better alternative, especially, when the market is growing.
- They want to make use of modern technology. Blockchain is revolutionary, really. You can transfer funds or information anonymously all over the world without governmental control. Sure, this may change in future.
- They want to emulate the success of early investors. There are a lot of stories featuring regular students who invested a few hundreds of dollars into Bitcoin in 2009. Now they are millionaires. Modern investors believe that it’s still possible to follow their way.
Newcomers think that cryptocurrencies are ‘easy money’ but it’s impermissible to ignore the risk that comes with crypto investments.
Ways to invest in Bitcoin
The rational behavior for all investors in 2018 is to patiently monitor the market and stick to the adopted strategy. Fluctuations may force you to quickly get rid of the coins, but panic-selling is never a good idea!
Long-term investment or ‘hodling’
This investment strategy is the most common. You buy the coins and… wait until the currency in your wallet rises, so you can sell it at a more favorable rate. Experienced investors can wait – or hold– for months or even years.
These are several hints on how to buy Bitcoin with a view to the long-term holding:
- Invest only as much as you are ready to lose due to high risks;
- Transfer coins from exchanges to hardware or software wallets;
- Deal only with reliable traders and sites;
- Buy fixed amounts of Bitcoin each day, week or month, not all at once.
Short-term investment or trading
The second popular strategy is more of a tactic. You buy the coins at a lower price and sell them at the higher one regularly. That’s trading. The main challenge here is to predict rises and falls of Bitcoin. You need both knowledge and luck to succeed in trading, so read the price analysis and reports, watch other investors and don’t forget about risks.
This kind of investment was literally a ‘gold mine’ of the past. You buy mining equipment and use its power to solve new blocks in the Bitcoin blockchain. Bitcoins are your rewards. But today mining hardware is extremely expensive as well as electricity needed to create at least one block.
3 pros and 3 cons of investing in Bitcoin
In conclusion, let’s overview the main reasons to invest in Bitcoin:
- The price is rising right now. After a significant fall, the price stabilizes and tends to move upwards. Researchers Ronnie Moas and Julian Hosp predict that Bitcoin can hit $28,000 or even $60,000.
- Pessimistic forecasts have been vain. Cryptocurrencies haven’t crashed to zero like some experts predicted. Comparing Bitcoin with dotcoms, we can anticipate that even at huge falls the market will survive.
- Technology is coming to real life. You still can’t pay for your lunch with Bitcoins but you can buy a house, for example, like Ivan Pacheco did. Optimists even predict that cryptocurrencies will replace fiat money.
And the main reasons to avoid it:
- There is much speculation. People buy Bitcoin to capitalize on its volatility, and not to benefit from its usefulness. Bitcoin is like a clear idea without real products or services. That’s why its future movements cannot be predicted.
- Other cryptocurrencies sometimes offer a higher profit. Not only Bitcoin can be considered a lucrative investment. Various alternative coins grow faster, so you can get more money quickly. Or lose it. Anyway, it’s better not to put all eggs in one basket.
Fast cashing out is impossible. Bitcoin exists mostly in the virtual reality, so you can’t exchange it for dollars instantly. Unexpected crashes are extremely risky events. It’s awful when you see how Bitcoin falls but can’t sell it the very moment.
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