Buying Bitcoin For The First Time In 2022? Here’s What You Should Do

Like a few other types of investment, investing in cryptocurrency isn’t right for everyone. However, if you’ve wanted to buy some, then you should make the right decision and buy some this year. Doing this might benefit you financially. But before you decide to buy bitcoin, here are a few things you should do.

Consider Your Emergency Savings

Any cash you put in the crypto market is money you can afford to lose. This doesn’t mean that you are guaranteed to lose. But because such a possibility exists, ensure you are financially set just in case some unplanned bills strike.

Before you buy crypto, take a closer look at your current emergency fund and ensure you have enough cash to cover about 6 months’ worth of all essential living expenses. If you don’t have a solid emergency fund, you might be forced to sell some of the crypto holdings at a loss to get enough funds and that’s not a position you want to find yourself in.

Research All Your Digital Assets Options

Even though some cryptos get more exposure and news time than others, there are hundreds of good coins you can add to your current portfolio. Instead of that, you can just try out the already established names such as bitcoin. The best thing you can do is to find the lesser-known coins and find a better fit.

Understand All Risks Involved

There is nothing like a risk-free investment. A few years ago, bonds were considered a safe bet, but these could also backfire and led to financial losses. However, bitcoin is a significantly risky investment, it’s riskier than stocks.

The main reason is that the crypto market often tends to swing dramatically as compared to the stock market, so the right value of the investments could shift notably from one day to another. Moreover, some stocks have been more traded publicly today than it has been for over 50 years. But even the most popular crypto (bitcoin) has only been around for just about 10 years; it’s not yet clear how much staying power bitcoin will have.

Moreover, new regulations might come down, which might make cryptocurrency less popular than it is today, in case it losses its status. This might not just impact your financial standing, but might also lead to less demand for bitcoin, quickly dropping its value.

This doesn’t mean that you should not buy bitcoin because of such risks, just ensure you understand anything can happen before you dive in.

Decide Whether Or Not Bitcoin Fits Your Investing Plan

Some investors buy bitcoin with the primary aim of selling it shortly just to make a profit. Others opt to buy bitcoin as a way to fund and secure their retirement. It’s important for you to seriously consider how bitcoin fits your investment strategy and how long you can hang onto it.

Buying bitcoin can be one of the best financial moves you might make in 2022. But consider these important aspects before you step in.

 

2 Cryptos That May Have The Biggest Impact

Ethereum

The upgrade to Eth2 to try and resolve network struggles with high transaction fees and congestion most likely boosts its appeal to the wide crypto audience. However, if there are notable technical issues and delays, this won’t just affect the Ethereum price, but it could also reduce the confidence investors have in the entire crypto industry.

Ripple

Ripple is a popular money transfer network that targets financial institutions. Currently, Ripple is in the midst of a legal battle with the SEC (Securities and Exchange Commission), which has an impact on other cryptocurrency projects. It’s because of these legal troubles that Ripple was most recently delisted from many US cryptocurrency-trading platforms. However, if the SEC wins the legal battle against Ripple, this could set a bad precedent and the agency might try to pursue similar actions against other cryptos.

 

You should pay close attention to these two coins. Since the crypto market is still pretty new and quickly evolving, the crypto coins mentioned above exemplify some major risks: operational, regulatory, and technical. As a potential investor in crypto, it’s always important to pay close attention to the individual cryptocurrency you want to buy.

 

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