You may be thinking that you need to have a lot of money in the bank to start dabbling in cryptocurrencies, but the reality is quite different. It is indeed possible to invest in crypto coins like the Bitcoin even without owning a fortune. Bitcoins should be viewed as an investment option much like any other regular investment options like gold, real estate, stocks, or bonds. You can always invest a small amount in Bitcoins to see if you are getting good returns, and discontinue if the results are not encouraging. Investments in passive income are important to have a healthy portfolio. It keeps you protected and secure in case you find yourself unemployed suddenly.
When you think of how small an amount you can invest in Bitcoins, you have to first understand that there is no minimum amount for Bitcoin investments. For instance, crypto trading platforms like Coinbase allow you to purchase Bitcoins with as less as two dollars only. Of course, investing with such a small amount makes no sense at all because the exchanges will charge you fees for buying, selling, transfers, etc. These will obviously impact your original investment. So, it is advisable to start off with $50 at least. The idea is to invest a sum that you can afford to lose.
Things to consider when deciding how much to invest in Bitcoins:
- One of the first things to look at when investing in digital currencies is timing. People generally start talking of Bitcoins when its prices are heard to be skyrocketing. However, when prices fall, the reverse happens and investors become wary of the product. When investing in crypto assets, you need to understand that market prices keep fluctuating; a market cycle can last for a couple of years. So, to get the highest returns, you must time your investments right. Refer to Finixio for more cryptocurrency investment suggestions.
- Since crypto assets are notoriously volatile, investors are scared as the future tends to be unpredictable. So, it is best not to ponder too much on how much you should invest; rather you should consider how much you are prepared to lose if prices go south. Think of the worst that could happen and see how much this can impact you. If you are unsure about your future safety, you should perhaps invest a smaller amount. Even experienced investors can engage in panic-selling. The idea is not to let emotions decide what an optimal investment amount should be.
- Another factor to consider when deciding on the investment amount is your own mind change. On many occasions you will find investors are not able to commit to an amount that they had earlier decided. So, you must always keep some room for changes in decisions. It can also be a good idea to make small investments at regular intervals of 3, 6, or 12 months. This helps you understand how the market works and you can then get the confidence to move onto a bigger investment amount.
- Understanding your returns tolerance is equally important when deciding on how small an amount you should invest. You must decide on an amount that you do not feel an attachment with; this will help you remain strong even if you lose the money. The trick to making money is to have a diversified portfolio and invest in Bitcoins along with other investments like gold, real estate, etc.