Everyone is new to Bitcoin at some point – there’s no shame in it. Still, sometimes the cryptocurrency universe can feel super overwhelming. There’s so much information out there that it becomes difficult to streamline things into the “need to know” category. New to Bitcoin and feel like you’re floundering a bit? Here are the 3 things you need to know.
1. What is Bitcoin?
Let’s start off with the basics first. According to eToro, “On 31 October 2008, Satoshi Nakamoto released a whitepaper titled Bitcoin: A Peer-to-Peer Electronic Cash System. The paper detailed modes of using a peer-to-peer network (a blockchain), to form a cryptocurrency that functioned outside of the boundaries of a central bank or authority. The paper was largely in response to the financial crisis that had occurred earlier in the same year, a recession which rocked the global financial markets.”
That’s right – Bitcoin’s only been around for the last decade or so. It’s a relatively new technology/asset that has grown exponentially in a very short space of time. At the time of writing, Bitcoin has a market cap of $154,439,283,581, and holds 68.2% dominance over the entire cryptoasset industry.
2. How to trade Bitcoin
Here are 3 things you need to know about trading it.
Now that we know what Bitcoin is, we can look into the actual mechanics of trading Bitcoin. The first thing you’ll need to do is set up a wallet and address – either a hardware wallet or an online one.
Then, do some research and find the right trading platform for you. Generally, those who are new to crypto go for an exchange, but a social trading platform like eToro could also be super beneficial for you as you can copy more experienced traders and still profit while you learn the ropes.
In the beginning, traders are most successful when they Hodl. To Hodl is to “Hold On for Dear Life,” and it means to ride out the ups and downs of the highly volatile crypto markets.
Hodling is a proven strategy – with 61% of Bitcoin hodlers reportedly able to sell at a profit, once the coin reaches $8,000. So, hold onto those coins, and you’ll likely see a very nice ROI.
Dips are part of the crypto investing game. The cryptocurrency market is highly volatile – there’s absolutely no getting away from that. However, you can prepare for dips. The other thing to note is that the crypto market is highly resilient and always recovers. 2018 was not a great year for crypto, with the price of Bitcoin topping at around $10,000 in February 2018, and finishing the year at around $4000. Contrastingly, Bitcoin had quite a solid recovery in 2019. After starting the year off at around $4000, Bitcoin recovered to a sprightly $12,920 in June 2019.
Ultimately, the name of the game is to hodl Bitcoin. Particularly when you’re new to trading cryptocurrency, hodling is a proven strategy that can effectively protect you from the dips. Furthermore, many analysts are now expecting Bitcoin to hit a market cap of $1 trillion in the near future, so you’ll be in good stead. Either way, with the upcoming halving waiting in the wings, Bitcoin is probably in for a bumper ride in 2020 and 2021
3. Bitcoin is the crypto gold standard
When it comes to investing in cryptocurrencies, you really can’t go wrong with Bitcoin. Bitcoin is considered by many as the digital world’s answer to gold. Just like gold in the 80s, Bitcoin is volatile. You can own an entire Bitcoin, like you can own gold, and Bitcoin is a market indicator for the rest of the cryptocurrency world. Just like oil or gold, Bitcoin is a safe haven in an incredibly volatile market. It’s proven itself, and stood the test of time, and will continue growing as we move forward. So, are you new to Bitcoin? Here are the 3 things you need to know – now use it to your advantage.