In a dynamic of building financial wealth, Introducing Bitcoin in particular and cryptocurrency in general into your wealth building strategy could be the best investment decision there is!
Indeed, despite a still mixed picture in public opinion, no other other asset class can boast of having experienced such growth rates in recent years.
Some examples over the period January 2016 – May 2019:
Bitcoin : from 400 to 7096 euros or 1,774% capital gain
Ethereum : from 0.883 cts to 223 euros or 27,875% capital gain
Ripple : from 0.005 cts to 0.36 cts i.e. 7,200% capital gain
BNB (Binance token), sale price: 10 cts to 26.11 euros or 26 110% gain
However, these impressive figures should not make you lose sight of a simple reality: it is always easier to get rich afterwards!
Like Biff Tannen, the villain of the film ” Back to the future “, Having the sports almanac, allowing you to bet for sure on the winners guarantees you a certain competitive advantage …
Unfortunately, in real life, there is only uncertainty, vagueness and a form of bet on a future, never written in advance.
This is also the reason why the regulations relating to the promotion of investment products impose certain legal notices, stipulating in particular that “Past performance is no guarantee of future performance”.
However, Bitcoin and the other main cryptocurrencies like Ethereum, Stellar or Ripple begin to appear in the inner cenacle very select of frequentable investment products. So, under the law PACT promulgated recently, is it now possible in France to have life insurance contracts including Bitcoin. We will also think of the imminent start of the American platform Bakkt, licensed from CFTC.
“It was not the primary objective of Pacte, but insurers will indeed be able to offer products based on crypto-assets. They will be able to do so through specialized funds ”. Joel Giraud Budget Rapporteur
France, country of investors, some statistics
Culturally, the French have always had a natural tendency to place part of their assets in investment products, both for the sake of seeking returns, securing their old age, but also out of an appetite for investment;
In France, 93% of households have financial or real estate assets. In addition, the average savings rate is 16%.
In other words, for 1000 of income, the French invest 160 euros in life insurance, real estate and other Livret A.
Unfortunately, the profitability of these investment products (excluding real estate) in recent years had tendency to reduce like skin of sorrow!
Worst : rates, in particular bank books and so-called “secure” investments, have fallen so much that they have fallen below inflation. Save…. Costs you money!
Boost your crypto heritage
In these unfavorable conditions, it is not surprising to seek to find new heritage approaches and new investment products. Gold in this quest, cryptocurrencies can have their place, on the condition of respecting a certain number of rules. Some are universal, and common sense, while that others are specific to the very specific blockchain environment.
Some will explain to you that investing in cryptocurrency today is the guarantee of a certain enrichment in the medium term, others that the whole ecosystem is just a bubble ready to explode and that it is appropriate to stay away from it as much as possible!
As often in life, the reality is more contrasted and everyone will have to find their positioning in the face of a sector that will revolutionize our uses, rich in opportunities, but also sometimes complex to grasp.
Rule number 1 – Have a plan!
Sounds stupid like that, doesn’t it? and yet, how many budding investors embark on the crypto adventure without knowing exactly where they want to go? Put your situation flat, what do you expect from cryptocurrency? May it make you rich in 10 years? Does it bring you pleasure? fun? maybe you are simply passionate about blockchain technology and, what better way to understand it than to practice it “for real”? Would you like to get started because you just read an article in the press which praises the insolent yields of Bitcoin over 10 years?
From the answer to these questions, naturally follows the following point:
Rule number 2 – Define your investor profile
Are you rather “holder ’ (you build up a basket of cryptos in which you believe and keep it until it breaks the ceiling) or “Trade“: Your thing is the movement is to make money as a crypto goes down, or up.
It will all depend on your temperament and your ability to resist stress. Keep in mind, however, that trading is a real job and that 90% of amateur traders are losers in the long run.
Rule number 3 – Invest only what you can afford to lose.
This is universal advice! You will rarely see on The CoinTribune pessimism about cryptos and blockchain in general, but for all that, you should never exclude the possibility of a dry and complete loss of your investment in the event of an extraordinary event (disruption by a new technological proposal or loss of confidence global for example).
It is vital that you never need the funds invested quickly and that the amount of these does not impact your daily life. Investing in crypto comes very very low in the pyramid of needs, light years away from the categories “rent”, “food” or “mutual” and roughly at the level of “leisure”, even “donations to works of charity ”!
It is out of the question that your exposure to risk puts you in difficulty and force you to make the worst possible decisions: those that imposed on you!
Rule number 4 – Corollary of the previous point: consider what you have invested as lost
We wish you 3- or 4-digit returns (it is seen and it will probably happen again), but it is almost a Zen doctrine! Determine the amount of your investment, get started, then consider this money as evaporated!
You will only sleep better!
Rule number 5 – knowledge and experience are also riches!
And as such, accumulating information is also an investment in the future. Take the time to document yourself, ask questions to the community (very dynamic and knowledgeable about the pitfalls to avoid), to clear specialized sites and to cross-check the information. You will thus create your own reading grid, which will be unique to you.
An acronym often comes up in the crypto ecosystem: DYOR ! “Do Your Own Research”, it synthesizes an important notion of the community: you have the keys to financial independence in your hands, it is an immense power! And do you know what great power comes with? bingo: great responsibilities! #spidey.
In short, be an actor, not a spectator
Rule number 6 – Make sure you learn from your mistakes
“I never lose, either I win, be I learn”, Thousands of haphazard Facebook statuses could have given the impression of having overused this quote from Nelson Mandela…However, get inspired!
You will inevitably make mistakes and suffer setbacks, get rid of this mental load right away and make it into a force. But to achieve this, it is necessary to create a context or you will not explode in flight at the first error, hence the absolute need for the following rule:
Rule number 7 – Determine your investment capacity and a timetable
Enter the crypto market all at once (“bim, I buy 5000 euros of Bitcoin and Ether! “) is probably one of the worst ideas there is!
If by “luck” you get 30% of profits in a week, you could be taken from the height of excitement and convince you that you have the soul of a Wall Street wolf!
Problem: you did just as well as the market and above all, you have learned nothing … It is written, transfigured by this intoxicating experience you will seek at all costs to renew it, and will enter into a logic that will have more to do with the casino than with investment!
Avoiding these setbacks is relatively simple by following these universal tips:
- Start by determining your investment capacity. This amount will be specific to each of course, but it should always fall within the definition of our rule number 3 : this money should not be essential. You can base yourself on an amount, a percentage … or consider that the income from a particular activity (baby sitting, sale of trinkets or clothes on the Internet for example), will be exclusively used to invest in the crypto market
- Smooth your entry into the market. Have you planned to invest 1000 euros? Enter the market in 5 X 200 euros, regularly. Sure, you might feel like you missed “the moment” when you had to enter the market, but rest assured: everyone missed it anyway! ;-). This strategy will also teach you to stick to a plan, to be rigorous and not to give in to the fever of what is called the FOMO (“Fear of Missing Out”, the fear of missing a great opportunity). There will ALWAYS be great opportunities tomorrow, so don’t worry.
Rule number 8 – Apply the 80/20 strategy
There are many possible investment schemes but if you don’t know anything, apply this simple approach:
- 80% of your investments in solidly established values (Bitcoin, Ethereum, Monero, Dash ..). To make it simple, draw from the Top10 of CoinMarketCap (the crypto encyclopedia listed).
- 20% in more exotic stocks or ICOs / STOs who “caught your eye”. You therefore have the opportunity to bet before everyone else, on a value that may explode, while limiting your exposure to risk.
Rule number 9 – Take your profits!
Excluding pure holder profiles (like your servant) who, projecting themselves at 2, 5 or 10 years, madly laughs at the hot flashes of the market, remember to take your profits!
As such, also have an exit plan : it can be built on the same logic that prevailed for your entry on the market: progressive.
For example, you invest 1000 euros in Bitcoin and your stake turns into 1500 euros (an increase of 50%, like that which the dean of cryptos experienced in May 2019): recover 200, 300 or 500 euros (in fiat, or via a transfer to a Stable Coin). You continue to have 1000 euros in BTC and you have made a profit and / or the means of reinvesting in another value “for free”.
Rule number 10 – Not sold, not lost
This is an old adage of a trader and like all adages, it is both a bit silly and deeply true!
Investor in crypto, you will know authentic moments of doubt, even frank bursts of anxiety! If Bitcoin is again dynamic, imagine having invested in December 2017, at the time of the 20,000 dollars of its ATH (“All Time Higher”, the maximum value reached by an asset)?
You would have spent the last 18 months dragging yourself -80% devaluation in the backpack!
Breathe, wait, after the rain comes the good weather. Whatever happens, don’t let the syndrom of the FUD (“Fear, Uncertainty and Doubt”, Fear, uncertainty and doubt, a feeling of anguish which can push the best to get rid in a hurry and without exit strategy, of all their assets, for fear of diving even more … the famous “Panic Sell” !)
Rule number 11 – Volatility is not the enemy
Investing in cryptocurrency is like diving into a tumultuous river. Some of your values will take 25% on Monday, lose 23 on Tuesday, before going back into lethargy is to jump 100% in a week.
Take some distance with this phenomenon that characterizes the youth of the sector! Assume that, as part of the ongoing standardization, this volatility is bound to disappear over time, and that today it’s probably her who will offer you the best opportunities!
Rule number 12 – don’t believe anyone’s word
We often talk about “Wild West” to describe the crypto ecosystem since its appearance in 2009 with the birth of Bitcoin. Now the Far West was gold mines, conquest and vast territories full of adventure and possibilities, but it was also the stagecoach robberies and bounty hunters!
The sector, hardly regulated by its very nature, swarms of crooks of all kinds, scams and dead ends. The danger lurks and there are many who will covet your golden bag!
In order to evolve in this safe environment, the technique is simple : don’t trust anyone a priori! It’s not about falling into paralyzing paranoia (the crypto community is also rich in human values and altruism), but maintain an attitude of positive mistrust.
In fact, most of the time you will not be aware of the real interests hidden behind this person who warns you against a crypto, or that other person, who absolutely wants to explain to you how to multiply your number of Bitcoin by 2!
Run away like the plague, any direct solicitation via social networks (Telegram in particular) and set up effective IT protection tools.
Rule number 13 – If it’s too good to be true … it’s false
Easy money doesn’t exist, sorry. Anyone who promises you “guaranteed” returns, the opportunity to invest “in the new Bitcoin” and in general if your interlocutors seem to put more money in glitter than in technology: go your way!
- If it sounds extraordinary, it’s probably lying,
- If you are guaranteed that you will become rich, you will end up poorer (or even ruined),
- If it looks like a Ponzi scheme, it’s probably one,
- If you have to decide quickly, you will lose money quickly,
- If you find it suspicious, it is
Understanding and applying these few simple rules will not guarantee you will get rich in 3 months.
On the other hand, it will save you from 90% of the mistakes made by the majority of people. In doing so, it may allow you to be part of the remaining 10% for which Bitcoin and cryptocurrencies will offer nice surprises in the months and years to come!
Nice to meet you, it’s Hellmouth! Editor-in-chief of Bitcoin, the crypto media you are honoring to survey right now (well done, you have taste).
Crypto-enthusiast of the second hour, nothing is more important to me than supporting the global adoption and democratization of the treasures that the blockchain offers us.
I write articles between two cocktails in Tahiti, my adopted island, and do not hesitate, if the opportunity arises, to feast on a plump scam or a little too enterprising Ponzi pyramid.
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