Bitcoin has become increasingly popular nowadays. People are discovering and investing in bitcoin every day. As a result, you will often find groups and forums online dedicated to Bitcoin and its related queries. While the growth of cryptocurrencies is still developing, people do not hesitate to invest in them. However, there are several mistakes that you need to avoid when buying large amounts of Bitcoin. Here is the information.
Inadequate Research
As per recent data, the price of bitcoin is around 61,589 AUD. If you look at the price predictions for bitcoin, you will see a 90 plus percent increase in its prices shortly. While it is a good sign for the investors, your investment should not be based on price predictions alone.
Remember that cryptocurrency prices are affected by many factors, and it is hard to tell whether the price will rise or drop as per expert predictions. Therefore, you need to consider a range of factors that affect cryptocurrency prices and how they will affect your investments.
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No Proper Financial Planning Before Investing
It is vital to make an investment that aligns with your financial goals (short and long-term). Here are some questions you need to ask yourself before making a financial decision.
- How much money do you wish to gain?
- How long will you keep the money invested?
- What is your risk-taking capacity?
Bitcoins are expensive, and you need to have a significant amount of funds for buying large amounts of bitcoin. Bitcoin has a cap on the maximum number of coins in circulation.
Crypto experts argue that around 19 million bitcoins are already mined, and only 2 million remain to be mined. Experts anticipate that all bitcoins will be mined by the end of 2140. Hence, it would be better to have a proper plan when buying large amounts of bitcoin. It would be best if you considered this factor while investing in bitcoin.
Not Prioritizing Security
Cryptocurrency and blockchain technology is considered secure, but that does not mean you can be careless about your investment. You must know that your bitcoins can be robbed, or you can lose them. If the hacker or crypto thief gets hold of the public and private key, your bitcoins are lost forever. Once you lose your bitcoins, few or no chances to recover them.
If you want to make secure investments, you must select a secure crypto exchange. Crypto exchange is the best place to buy and sell bitcoins. However, not all crypto exchanges are secure. Therefore, you need to look at the security technologies employed by the exchange to secure your assets. For example, dual authentication to access your accounts, biometric access, and secure crypto wallets to store your bitcoins are some of the excellent security features that you should look for.
Not Considering Slippage
When you intend to buy many bitcoins, you need to place an OTC order in your exchange, and the bitcoin sellers will respond to your request. Since you purchase different bitcoins from several sellers, the price is bound to vary.
Most sellers will be ready to sell their bitcoins at a reasonable price, but not all will be ready to sell bitcoins at the price you want. Hence, it would be best to consider slippage when buying large amounts of cryptocurrencies.
Conclusion
Buying or investing in a cryptocurrency has been rising over the last couple of years. However, there are mistakes you should avoid when purchasing bitcoins in bulk. By following these points, you will make a wise financial decision and investment.