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Fear and greed can push you into making very costly moves. Find out how to handle fear and greed when investing in Bitcoin.
Fear and greed are why many people make mistakes when investing in Bitcoin. Cryptocurrencies’ prices mainly fluctuate based on public perceptions, as presented over the media. While some predictions are usually correct, many of the campaigns are merely promotional materials seeking to attract traffic to crypto websites. Thus, investing based on such assumptions could easily see you lose a lot of money.
Most people experience the fear of uncertainties when investing in cryptocurrencies mainly because of the difficulty in predicting asset prices. On the other hand, greed makes people commit vast amounts of money quickly, expecting significant returns. However, that is not always the case. The following guidelines can help you manage fear and greed when investing in Bitcoin.
Apply Dollar Cost Averaging
The crypto market is highly volatile, with asset prices constantly fluctuating. Bitcoin is undoubtedly the most prominent cryptocurrency, with more excellent growth prospects. Over the years, this virtual asset has gained immense value, hitting an all-time high of $68,000 per coin. However, it has also experienced significant declines over the same period.
Predicting Bitcoin’s price movements with the utmost accuracy is not easy, and many expert projections often fall short. Thus, applying the dollar-cost averaging strategy could be one of the best ways to avoid making decisions based on fear and greed. The plan stipulates investing smaller but fixed amounts of money over an extended period.
The dollar-cost averaging strategy enables you to limit losses if the markets experience turmoil since it exposes only a portion of your investment to risks. On the other hand, it will also generate regular marginal incomes without being too greedy. In simple terms, it creates a sense of discipline, helping you to avoid making investment decisions driven by fear and greed.
Try Bitcoin HODLing
HODL is an acronym for Hold onto Dar Life. It would be frustrating to lose all your Bitcoin investments once simply because you read an article saying you could score huge incomes if you put all your money in. The assumption that the more significant the acquisition, the higher the payout is not always accurate and can be pretty misleading.
Holding Bitcoin in the long-term can be a great way to manage the constant temptation of taking hugely unnecessary risks. You will get peace of mind to focus on other investments, guaranteeing that your Bitcoin holdings will generate substantial returns in the future. Bitcoin’s value is growing, enabling you to make good money on the assets during re-sale.
However, Bitcoin holding is only ideal for long-term investors who are not interested in regular profits.
Lend Your Bitcoin
Crypto trading heavily relies on speculations, which might be true or false. However, please never take unnecessary risks with your hard-earned Bitcoin. There are many crypto lending platforms today, such as News Spy Technology, where you can invest your funds for interest. Lending the funds to other businesses or individuals could save you from the temptation of spending them on digital assets based on unconfirmed speculations.
The interest rates usually vary from one lender to another, based on the loan terms. However, most providers have standard rates to protect their clients’ assets and borrowers from market volatility. However, you should find a reputable Bitcoin lending platform to invest your money in. Lending your Bitcoin will ensure regular income without putting the assets at risk.
The hype on social media can quickly sway you. However, making decisions based on such speculations could be devastating. Practice the above tips to manage fear and greed when investing in Bitcoin.