When it comes to investing in Bitcoin, experience matters a lot. This is why you are required to consult a bitcoin Advisor.
You must go with deep research on expert advice before even looking for the platform to buy crypto. But for many, time is precious. They are not ready to spend a lot of hours online to find suitable advice.
Well if you are in the same category and don’t like to waste hours looking for suitable advice. Here is a resolute dossier that contains everything you need to know from the financial advisor. This will let you use your crypto wallet wisely.
- Josh Simpson (Financial Advisor, Florida) says that before investing you must know various facts about Bitcoins. You must know that it is a currency that is backed by absolutely nothing. When it comes to its value, it is not tied to any gold standard or to the strength of any nation’s economy. Its value is based on the beliefs of the people and it’s worth varies on a daily basis. This is why you often see wild price swings on a daily basis. This is happening from the time Bitcoin comes into existence.
This is the reason why major retailers are unlikely to accept bitcoins as a form of payment. The value of a bitcoin can be $20,000 per coin for today and tomorrow it can be $5,000 per coin. This can be a greater risk for major companies. As a result, they can lose millions of dollars in a day.
Moreover, bitcoin does not trade on any of the major exchanges. This is so because there is no established market for investing in Bitcoin. This means if you are looking forward to selling them, you have to wait for a potential buyer. If you find it quickly you may get what you desire but if you are unable to buy a potential buyer you have to wait for a long time. In this case, you can even face a huge loss.
Most of all, you need to know that it is a risky asset that is accompanied by volatile swings and there are even chances of its value becoming zero. This is why Tyson Romanick (Chartered Financial Analyst and Portfolio Manager, Washington) says you risk only that, you are willing to lose.
- Romanick further continues that when you are there to buy any type of asset, there are a lot of things that are required to be considered other than just binary decisions to go with. This is why you must be clear with what loss you can afford. This whole depends upon your financial condition and your risk tolerance ability.
It also matters from where you are looking forward to buying Bitcoins. It matters a lot which firm you are choosing especially if it is your first time. This is so because there have been a number of cases in the past when people forget their bitcoin wallet passwords. Thus they lose hundreds of millions of dollars in the form of bitcoins.
In order to prevent this situation, it becomes crucial to confirm whether the firm is going to take custody or hold it in your name like a stock, or you yourself are going to take their possession and are going to store them offline using cold storage.
So, you have made up your mind on how much you are going to invest and in which firm, the next thing is an investment strategy. You must be clear with whether you want to buy a single lump or you are willing to go with the dollar-cost average by buying smaller and equal amounts over time.
And what about the situation if the price drops to 80% or in another case if it becomes double? These things matter because you have to make decisions whether to hold your Bitcoins or to exit your position. This is basically the scenario where you can take the help of a financial advisor as this can make or break you financially.
It is clear that Bitcoin is not a safe place to invest in. You must be clear with whether you are ready to invest or not. And if yes, how much you are willing to lose. This is so because investing in Bitcoin is like going for a bet where you can win and make your fortune. On the other hand, you can lose and break your fortune. But if you are playing safe and that too with taking various pros and cons into account on a recommendation of a financial advisor, the chances are high that it will be a winning strategy, rather than losing all the time with no idea which steps to take next.
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