5 Biggest Mistakes You Can Make When Buying Bitcoin
What started out with a value of a few cents in 2009 is now one of the most valuable commodities on the planet after gold – and that commodity is none other than Bitcoin. After its dramatic rise in value, no one can question that Bitcoin is single-handedly the most valuable return-providing investment of the decade.
There are several investors out there that have made billions of dollars by investing in Bitcoin at the perfect time and then reaping their rewards in valuable returns. Inspired by their success, they have attracted a new legion of crypto investors who wish to invest in Bitcoin and if you too want to be a part of them, you can visit this site to do so.
The problem is, because of their inexperience and haste, these crypto investors also have the highest chance of rushing into buying bitcoin and then making countless mistakes along the way. These mistakes may be innocent but they can cost a large fortune, especially for new investors who are already inexperienced about the industry.
To prevent that from happening and to ensure no investor makes the same mistakes repeatedly while buying bitcoin, we are here to help you out. In this article, we will list some of the biggest mistakes that investors make when buying bitcoin that you should avoid at all costs. Read the article till the end so that you don’t miss out on any crucial details.
1. Not ensuring security before buying bitcoin
One of the simplest and most common mistakes many investors are guilty of is not ensuring optimal security before going ahead with their bitcoin transaction. We cannot stress how risky this move is, especially if you are trading in large amounts of cryptocurrency or fiat currency.
Considering the amount of hacker attacks that are increasing each year, it has become more essential than before to ensure that your cryptocurrency account and wallet is safeguarded by the best security possible. Contrary to popular belief, achieving maximum security is not a complicated and time-consuming task.
That being said, there are still several security measures you need to put in place if you wish to avoid hackers getting access to all your crypto funds. A simple way of ensuring maximum security is by using cold hardware wallets that don’t require the internet to function. This eliminates the chance of hackers installing spyware in your computer and tracking your online activities.
The next thing you need to ensure is that you don’t use public networks for accessing your online crypto wallets no matter what because these networks have the most chances of hackers installing viruses on your device. You can consider getting antivirus software to combat these viruses as well.
2. Not waiting for confirmations
Another common beginner mistake many investors make is that they don’t wait for confirmations when doing a transaction. While at face value, these confirmations can seem extremely useless but it couldn’t be further from the truth. After all, how will you even be trading with someone if you didn’t know their correct crypto address.
The problem is, there is quite a large chance that you send all your cryptocurrency or funds to the wrong address if you don’t check it once before sending. Sending cryptocurrency and funds like this is extremely unnecessary and expensive. This dilemma can, however, be easily avoided if you wait out for confirmations and check the transaction details in each one of them to ensure that you are transferring the funds to the right person and be free of anxiety.
3. Investing without research
Bitcoin is not an easy investment to make. It is a cryptocurrency, and thus, has an extremely volatile market. You never know when the market will grow and when it goes down out of the blue. Not understanding these risks beforehand and investing in Bitcoin without any kind of research can lead to guaranteed investing failure.
If you are buying bitcoin without understanding the blockchain technology, how mining works and what aspects influence the currency’s value, then there is quite a large chance that your investment will go down as a failure. While cryptocurrency doesn’t rely on research as heavily as the stock market does, and is mostly based on luck and real life events, it is still vital that you know all the terms and market trends before you proceed with buying your first bitcoin today.
4. Using PayPal or credit card
Another extremely rookie mistake that countless investors are guilty of is using PayPal or credit card to facilitate the payments in their transaction. Using these two payment methods for your
transactions may seem easy and convenient but the problem is that these payment methods are also the most expensive ones in the market.
Paypal and credit cards, may it be AmericanExpress or Visa, charge hefty tax rates for making crypto transactions. These transactions can cut extremely deep into your profits and cut down your profit margin considerably. If you want a better bitcoin buying experience where you don’t get charged with hefty taxes, you should consider using bank to bank transfer methods for buying bitcoin.
5. Biting more than you can eat
There is a common saying in the investing world which basically goes like – “Don’t bite more than you can eat”. This phrase, at least in the investing world, means that you shouldn’t buy stocks or invest in commodities if you don’t have sufficient money for it.
As a general rule of thumb – don’t buy bitcoin with money that you can’t afford to lose. If your budget is exceeding your own personal finances, we will strongly recommend that you refrain against buying bitcoin in the market. There are also other cryptocurrencies out there that don’t have much value now but are predicted to reach skyrocketing values in the crypto market soon.
We will always recommend buying smaller increments of cryptocurrency even if they don’t give you enough profit. It’s better to have a safeguard of some money with you rather than risking it all in an already volatile market.
There are several mistakes that investors should avoid making at all costs when they are buying bitcoin. We hope this article was insightful for you and if it was, please consider following our website for regular updates as it will help us out immensely.