In 2023, the third-biggest Bitcoin whale’s holdings shot up to $6 billion after they bought 2.7k Bitcoins, bringing their total to 118,017 Bitcoins. This amount is enough for anyone to see dollar signs swimming in their eyes.
However, it’s not as easy as you think it is to get into Bitcoin investing. In fact, if you’re not smart and careful, you stand to lose all your money.
Don’t be like the people who came before you. Learn from their blunders, so you don’t follow in their footsteps.
Read on for 7 common Bitcoin investor mistakes and find out how you can avoid them.
1. Borrowing Money to Buy Bitcoin
Perhaps you see a very good opportunity in front of you, but you don’t have the capital to make it happen. Many investors borrow money with the promise that they’ll pay off the loan right away with the profits made.
Keep in mind that cryptocurrencies are volatile, more so than other types of investments. Investing in Bitcoin is already a huge risk, and if things go south, you’ll owe a significant amount of money.
The best thing to do is to save up and wait for future opportunities.
2. Buying Into the Hype
Chances are, you’ve heard someone say Bitcoin or a different cryptocurrency’s “gone to the moon”. This creates a lot of hype, and you might get serious FOMO (fear of missing out).
You need to keep your wits about you though. Never let your emotions cloud your judgment, and never make rushed decisions without conducting some research first.
When you slow down and take a look at the facts, you’ll often find that the claims of a crypto going to the moon are unfounded. By pulling yourself away from the excitement and checking out the facts, you can avoid unwise investments.
3. Panic Selling
On the other hand, it’s possible to make unwise sales too. You might hear that Bitcoin will crash soon, or you might’ve seen a huge dip in pricing. Surely the value will keep dropping, so sell, sell, sell!
But once again, you need to take a deep breath and a step back. You need to remember that dips are natural, and things will recover given enough time.
So if you don’t need the money right away, it’s best to leave things alone in your Bitcoin wallets. Keep an eye on the market, and you’ll see that Bitcoin’s value will rise again.
4. Investing Only in Bitcoin
Bitcoin is the original cryptocurrency, and it’s what other cryptos’ values are based on. When its value rises, others follow suit, and the same goes for when its value drops.
Because of this, many people mistakenly think that Bitcoin’s the only cryptocurrency worth their time. However, putting all your eggs in one basket is a bad idea.
While yes, most other cryptos’ values are tied to Bitcoin’s, they still have their own factors that impact pricing. So one event can affect Bitcoin, but not other cryptos, and vice versa too.
What this means is you should spread your money out to various currencies. Investing in cryptocurrencies other than Bitcoin lessens your risk, as you’ll have plenty of chances to get a good return on investment, even if one or two investments fail.
5. Sinking All Your Money Into Bitcoin Investments
When you look at Bitcoin’s history, this crypto’s consistently had high values. So you might think, “this is a sure thing!”
But think twice before you dump your life savings into Bitcoin. Again, anything can happen, and while 1 Bitcoin can be worth $50,000 on one day, the market may crash and make its worth just $5 per Bitcoin the next day.
You should never invest more money than you can afford to lose. Needless to say, you should always leave a good cushion left in your savings account so that even if you lost all your investments, you still have a nest egg.
6. Obsessing Over the Price
Admittedly, you shouldn’t invest in something without keeping up with how it’s doing. But the best Bitcoin investment strategy is not to obsess over the price.
Not only will constant checks drive up your anxiety, but it also increases the chances of you panic selling. So while you should check the price maybe once a day or even less frequently, don’t sit around refreshing the page every 10 seconds.
You should also have a long-term mindset rather than a short-term one. If you do, then any slight drop or rise in price won’t bother you as much, as you’ll be looking further into the future for selling.
7. Not Having a Money Management Plan
No matter how little or much you make from Bitcoin investing, you need to have a good money management plan in place. Finances are a complicated matter, and the amount of Bitcoin you can buy or sell will depend on the assets you own.
It can be a good idea to consult with a professional to ensure your money and assets are protected.
Avoid Making These Common Bitcoin Investor Mistakes
Now you know some of the common Bitcoin investor mistakes people make.
The main points of Bitcoin investing are to have enough in savings, don’t borrow to invest, don’t put in all your money, and spread your cash around other cryptos too. And you should also be patient; don’t let your emotions control you and FOMO drive your purchases and sales.
By following these tips, you’ll have a more positive time, and you’ll see Bitcoin investment profits roll in. You’ll be a pro at it in no time!
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