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How to Maximize Your Bitcoin Investment Returns

By Guardian Nigeria
17 February 2022   |   2:54 pm
Most people believe buying and holding onto their Bitcoins is the best crypto investment strategy. While this might be true, you can do several things to maximize returns while mitigating the risks.

Bitcoins PHOTO: Pixabay

Most people believe buying and holding onto their Bitcoins is the best crypto investment strategy. While this might be true, you can do several things to maximize returns while mitigating the risks.

Bitcoin is undoubtedly a highly volatile digital asset. That’s why people trade it on platforms like Bitcoin Smarter for profits. But Bitcoin trading involves a higher risk compared to other markets. Consequently, Bitcoin is not an ideal investment for a conservative investor. Nevertheless, if you opt to invest in this virtual asset, implement the following tips to maximize your returns.

Invest in the Long Term
Long-term investment entails purchasing Bitcoin and holding it for at least three years. A long-term investment refers to HODL, a misspelled hold version in the cryptocurrency world. Ideally, the initials stand for Hold for Dear Life. Today, this term typically means buying and holding onto your Bitcoins.

A long-term Bitcoin investment provides a reliable way to increase your returns. Most Bitcoin traders are conversant with the Bitcoin market’s behaviour and technical analysis. Long-term Bitcoin investment means you don’t have to monitor the market daily, weekly, or monthly. Thus, you don’t make your trading decisions per the intraday market analysis results.

Essentially, buying and holding Bitcoin for an extended period means you have to ignore its short-term fluctuations. Eventually, you can sell your tokens for future profits once the price increases.

Implement an Effective Investment Strategy
Please don’t rush to invest in Bitcoin because your friends and relatives are doing it. Instead, develop and implement an effective plan. A long-term Bitcoin investment should have a strategy comprising objectives, time horizon, risk assessment, exit, and entry approaches.

As an investor, develop a well-researched strategy to maximize your returns. However, bear in mind that investing in Bitcoin is not the same as stocks and forex. Therefore, create and implement an effective and exclusive strategy.

Buy the Dip
When an investor buys the dip, they acquire the asset when its price has dropped. But this process could have various meanings and aspects depending on where and when you purchase it. Bitcoin traders can buy a dip even when its price is on a robust long-term uptrend. Thus, they do this hoping the uptrend will follow a minor drop.
The process of buying the dip is standard during a bull season. However, buying the dip is riskier than Dollar Cost Averaging. With dollar-cost averaging, the investor considers the long-term investment option. On the other hand, buying the dip entails considering the short-term investment.

When you follow the crypto market regularly, you acquire adequate information and knowledge about Bitcoin. Thus, you can use this method to boost your Bitcoin holdings. Nevertheless, only disciplined investors can benefit from buying the dip because they won’t fall into the temptation to purchase at the wrong time.

Try Dollar-Cost Averaging
Dollar-cost averaging entails purchasing Bitcoins repeatedly. Ideally, you can buy Bitcoins daily, weekly, monthly, or quarterly. Experts recommend assigning a date or day for purchasing Bitcoin and sticking to this schedule with this strategy.

Some people prefer this strategy because it increases the investor’s dollar holdings. Nevertheless, investors that use this approach can develop an emotional attachment to their investment. Also, buying Bitcoin becomes easier because your brain becomes wired to this schedule. This strategy is suitable for an investor that wants to hold Bitcoins for an extended period.

Final Thoughts
Long-term Bitcoin investing is the best approach. That’s because the cryptocurrency has proven to increase value over an extended period despite its high volatility. Nevertheless, how you maximize returns from your Bitcoin investment will depend on market behaviour and your mindset.

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