In the month of June 12, 2017, the price of bitcoin hit its all-time high. For the first time in the digital currencys history, its value inched close to the $3,000 mark. But in a three days time, its price dropped back to $2,264, amounting to a 24% drop in value.
However, by December, 2017, the price was seen to hit $19k, flying from $2.2k, to $3k, to $5k, to $7k, to $10k etc, to $19k. What a rise!
In the past, whenever bitcoin price experiences substantial drop, new investors do often sell their bitcoin to avoid further losses, while some would totally let go of Bitcoin investment, saying it's too risky.
Why is a Price Drop a Good Buying Opportunity?
Investors who do believe in the long-term appreciation of the value of bitcoin, do grap the opportunity of price drops to buy more bitcoin.
Though it's not that easy to time the market, that is, buy immediately after a price drop and immediately before a price rally, steep drops in the price allow bitcoin investors to add to their holdings at better price levels than if they were to simply keep buying during a bull market.
If you happen to be one of the people who believe in Bitcoin taking its place as an internationally recognised global currency and that it will continue to appreciate in value over time, then you should always consider any drop in price as a good opportunity to buy bitcoin.
Bitcoins Potential For Future Growth!
Every time the price of bitcoin drops, bitcoin haters do publicly claim that it is now finally the end of the supposed bitcoin bubble. Yet, historically, they have been proven wrong as the price of bitcoin do always recover to reach new highs not too long thereafter.
Interesting to know is what Goldman Sachs Head of Technical Strategy, Sheba Jafari, predicted in a document which was sent to the banks clients on July 2, that the digital currency would see another drop before rallying to an even greater value towards the end of the year.
According to Sheba, there will be a drop in the price of bitcoin due to what she terms as the corrective 4th wave. She was believing that the large surges in value witnessed over the past year have been due to a bubble that is now evening itself out.
Benefits of Buying and holding bitcoin!
The commonest way of investing in Bitcoin is buying the currency with the hope that it will appreciate in value.
Do not always take people's advice about what will happen with the currency, learn about Bitcoin, read about how its price has been over the years and come to a conclusion. Personally, my believe is that we are just starting, thats just my own opinion and you shouldnt consider that as investment advice as well.
A few pointers for buying and holding Bitcoins:
Do not invest more than you are willing and able to lose. Bitcoin is a very risky investment and you should keep in that in mind at all times.
After buying Bitcoin, transfer it into your personal wallet, never leave it at the exchange.
Ensure you buy Bitcoin only from exchanges that have their reputation proven.
Buy Bitcoin through Dollar cost averaging: That is, you dont buy all of your Bitcoin in one trade, instead you buy a fixed amount every month, week or even day throughout the year. This way you average the price over the course of a whole year.
What happens if I buy Bitcoins and the price goes down. Will I lose a quantity of my money?
If you buy a bar of gold say $12k, then the price of the gold drops to $6k you wouln not actually lose any money at all except you decide to sell your gold at that time.
But, if you are patient until the price of gold rises to $18k, then sell it, you will gain money. The key is an ounce of gold is still an ounce of gold, regardless of the "price" in some other currency.
So, If you bought one bitcoin and the price goes down, you still have one bitcoin. If the price goes up, you still have one bitcoin.
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