Tips on Playing Bitcoin During the Pandemic

Published by Yusuf As'Ari Friday 7 August 2020

 Ipingus. If there’s one thing good that the COVID-19 pandemic has brought to humans, it’s the resurgence of Bitcoin. With the rise of the number of daily online transactions, so too did the demand for this cryptocurrency rise. However, investing in Bitcoin today isn’t the same as it was months before the pandemic.

The Four-Fold Path for Bitcoin Investing during a Pandemic

1. Ignore the Naysayers

Many skeptics in the financial and media sectors preach that Bitcoin’s bubble is just over-hyped speculation. Some even say that it’s just a pyramid scheme. 

On the one hand, a growing number of people are starting to embrace the practical application and financial prospects of this cryptocurrency. And, these new Bitcoin players are making the market boom like it has never before.

 

Naysayers will continue to increase, as do the proponents of Bitcoin. Satis Group, a premier advisory firm, predicted that the Bitcoin trading of personal players will increase by 50% in Q4 2020. To be successful in this market, you must ignore what critics say. Instead, you should focus on the trends.

2. Always expect the unexpected.

Volatility also exists in Bitcoin markets. You mustn’t ignore this. It’s a fact that the higher the volatility of an asset is, the riskier it is to invest in that security. Bitcoin’s value doesn’t fluctuate that much and it’s more stable than other tradable financial assets. 

 

Seasoned investors are used to sudden price swings of this cryptocurrency, which rarely occur. By mentally preparing yourself for such instances, you can change your trading strategies accordingly, and be ready for the unexpected. 

 

How can you combat significant price swings? You need alternatives to your plan A. Consider all possible future scenarios of your investments. By doing so, you won’t lose much of your capital.

3. Avoid bad trades.

What’s this? Don’t join the pump and dump group or pump-and-dump schemes, a price manipulation technique wherein a group of traders drives a cryptocurrency’s value through coordinated buying. Certain gurus or social media communities promote such endeavors. 

Trading Bitcoins is considered a zero-sum game. This implies that there’s always a loser and a winner in every transaction. Unless a strong investment or trading strategy is set, following the advice from such groups will just make you lose a lot of money. In pump and dump groups, there are two types of members: the organizers and the victims.

4. Don’t store all your BTCs in just one basket.

Diversification is key to success in any type of investment or financial market. Just as experienced investors recommend to take positions in various types of stocks, it’s also important to diversify your Bitcoin portfolio. 

 

If you want to diversify, you must put your funds in multiple bitcoin wallets to minimize the risk of losing all your capital. By allocating your funds across various platforms, you spread the risk. You may also invest in different industries using your BTCs.

Final Words

COVID-19 pandemic has significantly affected economies and markets around the world. Traditional commodities and stock markets have been experiencing extreme market volatility. Even Forex markets are on a decline. Bitcoin, along with other cryptocurrencies, saw a significant rise in value. 

Although there are days when its price goes down, investing in bitcoin today will definitely bring you high returns. Bitcoin markets have never been as stable since the start of the pandemic, and investors forecast that this trend will continue for several more months.