Let’s face it, considering the news lately an investment in bitcoin is not something everyone is prepared to dive in to. Yes, even if you plan on simply spending it for goods and services, holding bitcoin for more than an hour will likely result in a net gain or loss to some degree for you. Veteran or rookie, small fish or big fish, there are some things every person should think about before buying bitcoin.
1) How well do you understand bitcoin?
This seems obvious, but wishful thinking can often can get the better of us. Have you spent a reasonable amount of time researching it yourself, or did you register at Coinbase immediately after a friend told you about his 1000% return on investment? A great starting point is the ‘Getting Started’ page here at BlowStamps, or Bitcoin.org’s FAQ. It’s easy to understand how features like near-instant/nearly free global transfers and uncounterfeitability make bitcoin valuable, but understanding how it works will strengthen your resolve when the news cycle is negative, and cushion you from emotional decisions that you will regret.
2) Will you spend it?
This isn’t some autographed football! Bitcoin is a virtual tool designed for use. I strongly encourage you, no matter your intentions for long-term/short-term investing, to spend bitcoin on something. Much like taking the time to research it, this will give you a lot more insight about the media coverage on bitcoin. Whether your experience spending it turns out good or bad, it will inform your buy/sell/hold decisions vastly. If you’re like me, it will make you a believer in Satoshi.
3) Are you ready to lose your investment?
Don’t invest money you are not prepared to lose. Yes, this is said about every investment, but it is especially true about anything as volatile as bitcoin. Even though bitcoin is still so new that it is easy to see growth as inevitable, that is easily forgotten during the not-so-uncommon 20% drops that occur after any bad news. If you are not ready to lose all of your investment, you will more than likely sweat these drops until you inevitably sell your bitcoin at a loss, only to watch the price rise from the ashes to 150% of where it was.
Get the theme?
If bitcoin isn’t for you, that’s fine, thank you for your interest! Remember it is still so early, there are many unexplored possibilities in development yet to see, so keep up with the news on it. However, If you understand bitcoin, you’ve seen what it can do, and you agree there is a need for what it does, just remember there is no minimum investment, and little to no fees to get involved. No matter how much you gain or lose, you will learn, and you will be part of something like nothing before it.