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My journey into cryptocurrency investment for the long term — Part One.

Bitcoin is a cryptocurrencymedium of exchange and store of value. It is just one of many cryptocurrencies in the market but by far the most popular. I have recently become very interested in this market and have decided to take time and study the cryptocurrency eco system.
I have heard my own doubts about the currency with hindsight knowledge of forex trading and how people’s hands got burnt because of a barrage of reasons of course. I’m sure well researched and informed forex traders do well. I plan to gather as much information as possible and research about it as much as I can to better prepare myself before I can seriously invest in bitcoin or any other cryptocurrency I decide to invest in.
One must be very careful though before investing because the risk here is also high. Bitcoin is a decentralised system where people come to buy and sell bitcoins, to purchase commodities and to also store value in anticipation of making a profit when bitcoin value appreciates. Its decentralised nature is both a negative and a positive. It is a positive because no one single entity controls the bitcoin eco system.

Cryptocurrency: a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank

This means you can trade and exchange bitcoin without government intervening in your business. All the transactions are public and are stored in a public ledger system called a blockchain but the information about the transaction are not visible to anyone. Its strongly encrypted nature using complex math algorithms makes it almost impossible for the snooping government or any other malicious individual to figure who and what the transactions are about.
On the one end, the negative is, Bitcoin is not backed up by any government or other body like for example the other currencies are backed up by the central bank of a specific country.
If a bank got robbed with your money in it, you can still get your money through the insurance company that the bank is insured with. Bitcoin on the other hand, once the blockchain is hacked or a bitcoin exchange service like BitStamp got hacked at some point, you lose everything you have invested in it.
Hacking the system is not a day in the park. the blockchain system is solid with encryption and it gets better all the time. Since the invention of cryptocurrencies there have been several sophisticated attempts to try and hack the system but I have only heard of one successful one.
So, my strategy investing in cryptocurrencies is going to be long term and disciplined. Experienced people emphasize on getting into this by investing what you are willing to lose and having a return on investment goal.
Do not get into the greed trap by wanting to stay in longer than anticipated because the price seems to be surging at that point in time. When you reach your ROI goal, cash out your profit and re-invest back the principal. Rinse as much as you can with a long-term investment plan, you can do this once every quarter.
What to look out for
There lots of cryptocurrency exchanges on the market but be very sure to pick the one that is well recommended by people who have been in the game for a while and in my series, I will recommend some as I also gain experience. I will not commit myself now based on hearsay.
Follow the trends of the cryptocurrency of your choice, and be sure to not complicate it too much. Remember you are not going to be day trading but investing for the long term. Bitcoin for example is a very volatile currency, so as the price fluctuates be sure not to make impulse transactions based on the events of the day.
Buy when the price is going down and sell when the price is going up, remember to stick to your ROI goal and not getting too greedy. We are in this for the long term; remember?
Follow the news, and you can do this by following influential people in the system through their blogs. You can also follow journalists that specialize in reporting on cryptocurrencies because they will break the news before the official cryptocurrency exchanges do.
I recommend Coin Desk for checking out news and price fluctuations over a period, which will inform you of when to invest or not. Pay attention to in-country and international news as well, about their local and international exchanges respectively.
At one time Russia banned all cryptocurrency websites, and shut own all transactions in the country, and that heavily affected the price of bitcoin in 2015.
The debacle of silk road; a criminal dark web underworld establishment that was dealing in drugs had its bitcoins auctioned and that too caused a lot of panic, and investors dumped their bitcoins, which caused the price to tumble.
Conclusion is don’t get too carried away, and remember to invest money that you can lose. Cryptocurrencies are very volatile and true value and opportunity to make money is through its volatility, only when you are not irrational. Remember to invest for the long term, day trading will hurt you.
Look out for my cryptocurrency blogs, and remember to share and comment. I promise to be your eyes and ears on this journey as I share my experiences investing in this market. I’m very excited and equally cautious as I take on this journey. In the second chapter, I will be considering Bitcoin mining and what the opportunities are for countries and business to benefit.
Published inLife hacks

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