Biggest mistakes you can make when buying Bitcoin

Bitcoin came to market in 2009 and has since grown into the world’s leading cryptocurrency. It closed its first year at slightly over one million coins. Today, there are well over 18 million Bitcoins in circulation. But even more astonishing is Bitcoin’s monetary value compared to 12 years ago. A single Bitcoin is currently worth $56,054 (at the time of writing this) – in January 2009, that price was $0. If you had bought and held just 100 Bitcoins back when they sold for mere pennies, they’d be worth over $5 million today.

Interestingly, trading in Bitcoin is still a highly lucrative venture. Experienced investors earn generously by capitalizing on small price fluctuations in the cryptocurrency’s value. However, investing in Bitcoin is considered a high-risk venture, likened to stock or forex trading. But the nature of crypto trading is not entirely to blame for the associated risks. Traders also make dangerous mistakes that jeopardize their investments.

Not prioritizing security

Unlike banknotes, Bitcoin is a decentralized currency whose transactions are controlled through a distributed ledger. This makes it impossible to track any Bitcoins leaving or entering your wallet. So, it’s up to you to secure your Bitcoin wallet or repository to ensure the valuable investment doesn’t fall into the wrong hands.

To assure safety:

1. Sign up to a reputable crypto trading or exchange platform with a proven track record of scam-free trading with advanced security features and safety guarantees.
2. Hold your Bitcoins offline in a cold wallet rather than vulnerable online wallets.
3. Avoid transacting via PayPal due to chargeback issues or sharing your payment cards’ information with strangers.

Not fully understanding your Bitcoin investment

Investing in any part of the cryptocurrency industry is risky and a bit tricky, especially for beginners. Don’t just pour your hard-earned money into crypto just because everyone is doing it. You have to get your head in the game and precisely understand what you’re getting into. Do extensive research into what drives the Bitcoin market, when to sell or buy, and define your investment’s long-term or short-term goals. It also helps to become part of merchant and buyer networks within trading communities to keep up with emerging trends in the crypto world.

Investing solely in Bitcoin

Bitcoin’s success opened the floodgates for a new age of cryptocurrencies. There are currently over 5,000 unique cryptocurrencies worth over $2 trillion. Although Bitcoin still dominates the crypto market, other upcoming coins such as Doge, Ethereum, Binance, and Tether (USDT) show great investment potential. It’s vital to diversify your investment portfolio, especially considering that cryptocurrencies can fluctuate dramatically in value without notice. In other words, don’t put all your eggs in one basket. Spread out the risk and maximize profits by investing in several cryptocurrencies alongside Bitcoin.

Staking more than you can afford

No matter how you look at it, cryptocurrency trading is a risky business. Bitcoin’s price has risen steadily in the last couple of months, but that hasn’t always been the case. Over the years, Bitcoin prices have shot up and plummeted unexpectedly. For instance, on April 18, Bitcoin slipped by a record 10 percent in only 24 hours. Cautious financial advisors and even banks actively warn against cryptocurrency dealings. But rather than waste an investment opportunity, the best compromise is to play it safe. Run crypto trading as a secondary or passive income stream. As a rule of thumb, only invest a sum you’d be comfortable losing.

Not working with the experts

Cybercrime is among the most significant threats facing cryptocurrency trading. In the 2020 Cryptocurrency Crime and Anti-Money Laundering Report, Cipher Trace confirmed that $1.36 billion worth of cryptocurrency got stolen in just the first five months of 2020. Crypto theft occurs through scams, compromised trader accounts, and hacked exchange platforms.

One way to secure crypto trading is by reinforcing end-user and network security on the trading devices. Suppose you’re serious about trading in Bitcoin. In that case, you can’t afford to ignore working with an IT security specialist to strengthen the safety of your investment, devices, and personal data. At KME Systems, we’ll gladly provide you with robust cybersecurity solutions and guide you in setting up the necessary tools to trade safely. Get in touch to learn more.