Protecting your Bitcoin is important. Are you doing it? Welcome to episode 3 of my cryptocurrency trading series, where I will teach you how you can protect your Bitcoin, and when you should buy & sell.
In episode 1, I shared with you my investment philosophy, mindset, and strategy around investing in cryptocurrency. In episode 2, I shared the different wallets and exchanges that I use, and how to buy different Altcoins.
If you have yet to watch those episodes, check them out on my cryptocurrency trading series playlist, because they lay the foundation for what I am going to share with you today. Every video is meant to build off of one another, and the content will get more advanced as we go along.
Are you ready to dive into episode 3 of my cryptocurrency trading series to learn why protecting your Bitcoin is so important, and when you should buy & sell?
Watch the video below:
(Click here to watch on YouTube)
[smart_track_player url=”https://www.buzzsprout.com/9299/642460-plm-527-when-to-buy-sell-protecting-your-bitcoin.mp3″ background=”default” ]
Are you ready to start protecting your Bitcoin? CLICK HERE to get the Trezor Bitcoin wallet!
DISCLAIMER: Investing in Bitcoin or any cryptocurrencies are risky. As I've mentioned many times, I do NOT recommend investing money that you can't afford to lose. Nobody knows if Bitcoin will go up or down tomorrow – it's just speculation. For me personally, I consider the money I invest to be my “Vegas Money” – meaning, I'm gambling it. If I win, then I win big. If I lose, then I'm not surprised and it was money that I could afford to lose. That's why it's important not to invest a significant portion of your money into it. So if you do invest, I believe it's smart to start with smaller amounts.
Let's dive into why protecting your Bitcoin is important, and when to buy & sell.
Let me start off by saying that, at the moment, cryptocurrency is down, but I look at this as an opportunity. This may seem counterintuitive, but let me explain why I take this approach.
I don't panic or freak out when the market is down because I believe that a smart investor should always have a cash reserve, which is money that you put aside that you can use when the market dips. Because I take a long-term approach to investing, I buy more when dips occur, because I know that I can buy Bitcoin, Litecoin, or Etherium, at a discounted price.
Sir John Templeton, who is one of the greatest investors of all time, believed that you can be the best during experiences of maximum pessimism. When people are panicking and selling their cryptocurrency, that is the moment at which you should be buying. Whenever people are buying, that's when you should be selling.
When it comes to investing, you need to be able to remove your emotions from the equation. If you are panicking when Bitcoin drops, then what that tells me is that you have probably invested more much money in Bitcoin than you should have. Like I said before, you shouldn't invest more than you can afford to lose.
Once you start building your investment portfolio you will come across a technique called, dollar cost averaging. This investment technique involves buying and selling, at consistent intervals, regardless of what is happening in the market. The philosophy behind it is that people might be better able to handle the emotional storms that can occur when there are dips in the market.
With wallets, like Coinbase, you can actually set up automated weekly or monthly buys. By taking this approach, you can just ‘set it and forget it', and you don't have to pay attention to the ups and downs of the market.
When it comes to selling cryptocurrency, you first need to look at what your reason is for investing. Ask yourself, “Is this money that I actually need?” Personally, I don't really need the money that I'm investing. It's not money that I depend on, so I'm not focused on selling in the short-term.
I plan on selling in the long-term when my money is at a significant gain, at which point I'll take out a percentage of it. This is why it's important to know what your investment strategy is before getting into the cryptocurrency game. This is the approach that I take.
However, you can take a different approach. Let's say that today you invest $500, and tomorrow that money goes up to $1,000. If you wanted to, you could take out and sell $500 worth of it, and keep $500 in. This way, you don't lose anything. You are now only investing the capital gains of that money and having it grow. Or, you can continuously buy over a period of time.
When it comes to selling, you can sell on any of the different wallet exchanges that are on the market today. Coinbase is the most popular, however, there are many others. Decide which one works best for you.
Keep in mind that Coinbase mainly operates in the United States. I use Coinbase to buy, but if you are from Canada, like myself, you can't sell using Coinbase. This is why I use Coinsquare. With this wallet, you can actually transfer funds from one exchange to another, so I could transfer from my Coinbase to Coinsquare to Binance, and so on.
Protecting your Bitcoin is so important. Are you doing it?
You need to understand that your money is being stored on different wallets that are run by private companies. They control your money, but they aren't like banks that are government-regulated and much more secure.
These private companies can be at risk of being hacked. This is why protecting your Bitcoin is so important. In order to protect myself, I keep a certain percentage of my cryptocurrency spread out amongst four different online exchanges – Coinbase, Binance, Bittrex, and Coinsquare – so that if one of them gets hacked, I still have money left on the other ones.
Ultimately, the best way of protecting your Bitcoin is by using an offline hard wallet, like Trezor. This wallet allows me to connect a USB to my computer and transfer my Bitcoin, Etherium and some other Altcoins to this device, where my cryptocurrency gets stored.
I keep this hard wallet in a safe place, and only I know what the recovery password is. You wouldn't want to store your private key or your pin on your computer or another digital device, for risk of getting hacked. If you've invested a couple thousand of dollars worth into cryptocurrency, it's a good idea to invest in something like this.
That's it for episode 3 of my cryptocurrency trading series on protecting your Bitcoin and when to buy & sell! I encourage you to create an investment strategy that works for you, with the understanding that there will always be ups and downs in the market.
In future episodes, I will be interviewing different cryptocurrency investors that have higher levels of expertise in this area, so that we can all learn more about the exciting world of blockchain technology. Stay tuned for more exciting content!
This page contains affiliate links. If you purchase a product through one of them, I will receive a commission (at no additional cost to you). I only ever endorse products that I have personally used and benefitted from personally. Thank you for your support!
Are you ready to start protecting your Bitcoin? CLICK HERE to get the Trezor Bitcoin wallet!