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Best Bitcoin Investment Strategies for 2018?

How do you define “best”?

Is the best the most profitable, or the one that makes you rich, or the one that has a risk level you like?

Welcome to the world of actual investing!

Ms. McCormack gives good, practical advice, but it is not going to let you quit your day job. Day trading (buying and selling based on movement in price minute by minute) can do that, but you have to have nerves of steel and capital to risk.

I think the days of building significant wealth in Bitcoin are finished. It may go up, and it may go down, but I think the massive gains have already been made.

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There’s a quote that goes something like “Leave the first 20% of gain in the market to those smart enough to get it, and the last 20% to those greedy enough to chase it. Content yourself with the 60% to be made in the middle.” I think we are in the last 20% stage.

I would like to take a moment to help newcomers with keeping Bitcoin profitable for them. Throughout this post I will use a few terms:

  • when I say “dip”/”price correction” it really comes down to the same thing: A rapid drop in Bitcoins value (where a drop of atleast 20% is the rule rather than the exception)
  • HODL; even though most people know what this means, it simply refers to not selling your Bitcoin, no matter what.
  • Upward trend; The pricetrend of Bitcoin on a certain timescale (usually a month or so). In an upward trend, the price may suddenly drop at a certain point, but overall there still is a rising trend in Bitcoins price. Not all price drops are trend breaking: they are naturally ocurring.
  • Downward trend; opposite of upward trend. On a timescale (usually a month) the price is going down. Sudden increases in price doesnt mean the trend is broken.

For newcomers (or anyone else), please read this post about investing money and irresponsibility, and see this post about when to sell and HODL.

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Okay, off to the best investing strategy for most people. In my history as a small Bitcoin investor (call me a hobbyist) I have learned a fes valuable lessons. I initially invested in Bitcoin when it was in a strong upward trend (a few days before when it hit 5K for the first time). When it did hit 5K I did not sell my Bitcoin and held onto it. Bitcoin dropped back to between 4k-4.3k and stayed quite stable over there for a while. At this point I had not many a single bit of profit, but I wasn’t too worried: I had Bitcoin and surely it would rise again. At a certain point it rapidly dropped from 4.3k to 3.9k. I sold at 4k, thinking i’d cut my losses and buy in at a lower price again. However, this rapid drop faced a rebound with the price quickly going up to 4.3k again. As I here thought the price would now surely rise to 5K and beyond, I again bought Bitcoin (the same amount, for the same price as the first time. Do note: I already lost money here). But it didn’t go up. In fact, a few weeks later news came… “China ban Bitcoin”. Rather than going up, the price gained a massive dip: it went all the way down to 2.8-2.9k at a certain point. I faced two options: sell Bitcoin, buy in lower (with a large chance of not buying in time), or hold on to what you have and buy a small additional amount in the dip. I decided to do the latter, which was a great choice in the end. From this point I also ‘decided’ to do the following: HODL on to the Bitcoin I have and don’t sell it. Buy in dips and profit.

Image result for bitcoin investment strategiesAfter a while Bitcoin would rise to 5k, 6k and eventually even 7k! (yes, this was only very recently). The sudden rate of growth surprised me and I was convinced a correction was due to happen. But I held on to my Bitcoin at this point, hoping it would go even higher. It didn’t. Again, Bitcoin was faced with a rapid price drop from 7.3K to around 6K. I panic sold again (yes, I know I had sworn to HODL. I guess I’m a slow learner) at 6.4k. Bought back at 6.5K…

How much Bitcoin do I have now, might you ask? I’m not going to state exact numbers, but lets say it is about 3/5th of what I initially had when buying for the first few times. That is the result of not HODLing for people who aren’t full-time watching the charts and who let themselves be led by their emotions: you end up losing money.

Currently we see Bitcoin being at yet again a very ‘high’ price-point (compared to it’s history). Again I am faced with that choice: to HODL or not to HODL, that is the question. This time I am HODLing. If you look at the pricechart on a week-scale it might look like Bitcoin is currently trending downward. Now I say to myself: zoom out you fool. On the 1-month chart you can see that Bitcoin has risen from 6K to it’s current price of around 15K. It is normal for the price to go down a bit after such an insane price increase. Don’t panic, and if anything; don’t sell. HODL. The most valuable lesson I have learned is: it might look like a good idea to sell now, but you’ll probably end up regretting it later.

To all the newcomers and anyone else who doesn’t want to make the same mistakes as me: for your own sake, just hodl on to it. You’re probably not going to be that guy that always sells at highs, buys at lows. You’re most likely to get less and less profit in the process of trying to be that guy than that you could’ve had when just holding on to what you have.

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