Any of us who have been astute and used the surge in bitcoin as well as many other crypto coins to be able to further create financial gains on top of our winnings may now be wondering what the drop in bitcoin might mean for us. Whether it should suggest that we should stop using cryptocurrencies because of the potential losses that it could cause if the value continues to drop – click for the info.
Understanding the basics of Technical Aspects of Financial Investment
So, the fundamental question that we have to ask ourselves is whether we think that bitcoin is going to grow or fall further in price and subsequently creating additional gains on our winnings.
Anyone who has looked at stock or forex trading will probably come across the industry adage of “Buy Low, Sell High” this concept tells us that when the value of something drops that we should buy-in, because it is statistically probable that the value will increase, whether that be inside of a few months or a few years. This concept applies to well-established cryptocurrencies such as bitcoin as well as stock – it is not a foolproof concept, but once something is established, we must think about the level of the financial crash required to kill bitcoin and understand that things would have to be catastrophic for that to happen.
What can we actually do?
With this in mind. The real thing that we should be asking ourselves is not whether we think that bitcoin is going to grow or fall. We should ask ourselves when or rather, whether we need the money that we are making from gambling. Converting winnings into in investment could be a really good way to get a crypto portfolio started. This drop in price has created an opportunity to buy in, but there is still the potential of the value falling further. Anyone who knows technical analysis knows that nothing is certain.
That being said there is an investment theory called dollar-cost averaging, this is an analyzed trend occurrence across most stocks. The principle is that if we invest a regular amount consistently, regardless of the movement of the price that over a 10-20 year period there will be a profit made. This may sound peculiar, but it is true. It can be a little difficult to conceptualize, so get online and do a little research.
Essentially what this means is that if we don’t need winnings that we are accruing, we are able to use this to create a strong crypto portfolio. The crypto market is huge and still growing. There is a little more safety in the big cryptos such as Bitcoin, Etherium, and Litecoin. That being said, something like XRP has a low value but has a strong backing and huge potential growth as well as HOT which has some interesting future potential. Do further research to get a good understanding, but now could be a great time to get started.
“The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese Proverb.