How much should you invest in Bitcoin?

Investing in Bitcoin is such a popular market trend right now. With some prior knowledge and understanding of the crypto market, you can turn your investment into a profit over the long term. To help you get there quicker, let’s talk about what’s a good amount to invest in BTC.

Factors to consider before Investing in Bitcoin India

1. Risk tolerance

All virtual currencies are volatile. They are also unpredictable to a large extent. And that applies to Bitcoin too. Consider investing only how much you can part with and won’t mind losing, in case the market crashes. If the idea of losing what you are thinking of pumping into the market makes you uncomfortable, consider it a sign that it would be better to reduce the amount.

2. Profit expectation

Knowing how much to invest is also about knowing how long you want to hold and how much profit you want to make.

It helps to consider how you would feel if you earned a huge profit on your investments only to lose it soon after. Think about the many investors who put their life savings into crypto during the 2017 boom and got rich in no time. Had they reinvested those profits (any many surely must have), the next crash would have brought them back to square one. You wouldn’t want to be in their shoes, right? That’s why it helps to define what your profit expectations are right in the beginning so that you don’t get tempted to put yourself through unnecessary risks later when you could very well be walking away with a decent sum instead.

3. Timing the market

Market timing is something to pay close attention to before investing in Bitcoin. When Bitcoin’s price rises, everyone talks about it. When prices are at their lowest, everyone goes quiet. Being cautious and watching the trends closely is a great way to keep abreast of market cycles. Pay close attention and give yourself time to ask, “Should I invest in Bitcoin now? Is this the best time for me?” Invest only when the market timing is right for you.

4. Portfolio diversification

Portfolio diversification is widely recommended. Cryptocurrency is independent and unrelated to other assets like gold and real estate. Hence, investing in Bitcoin is considered a better investment. But it is also volatile. That is why we recommend you created a balanced portfolio by including other assets like real estate, gold, or stocks. You should invest in Bitcoin only after deciding how you want to diversify.

5. Room for change

The virtual economy is constantly changing. So, leave room for change. When deciding how much to invest in Bitcoin, allow yourself the possibility of changing your mind in the future.

To give yourself the space to understand yourself and market behavior better, you could invest in intervals of three months. Gradually increasing your investments will give you the time you need to help you become confident enough to invest more. It also ensures that you don’t make investments you regret and can’t back out of without suffering losses.

How to invest in Bitcoin in India 2023?

Here are a few steps through which you can invest in Bitcoin in India:

• Pick a cryptocurrency exchange platform, and sign up. Complete your KYC.
• Purchase Bitcoin.
• Deposit it into your account.

All crypto exchanges are likely to sell Bitcoin. If you ask us which exchange you should pick, we will naturally recommend ours. But do your own research and read about how to pick an exchange before making your decision.

And, of course, take the tips above into consideration while deciding how much to invest. Investing in Bitcoin in India is Legal.

What is the minimum amount required to invest in Bitcoin? 

There is no minimum order required to purchase Bitcoin. There may be some cryptocurrency exchange platforms that place this kind of limit, but most exchanges, including CoinSwitch, let you begin investing with as little as ₹100.

We do not recommend investing such a small amount as crypto platforms charge fees for every transaction which may nullify your investment. But possible, it surely is.

Is it safe to invest in Bitcoin?

Investing in Bitcoin in India is safe. Many first-time investors ask us, “Is it safe to invest in Bitcoin?” There is no straightforward answer we can offer, but if this is a question that is at the back of your mind too, do think about the points below before investing in Bitcoin:

• It helps to be completely detached and unemotional with your money invested in Bitcoin. Since cryptocurrency is volatile, you may either lose money, receive huge returns, or the market might remain static. There is no telling. So only invest what you do not fear losing. Experts advise limiting Bitcoin investments to less than 5% of your portfolio.
• Bitcoin is passive income. Your investment in the crypto asset probably will not fetch you immediate returns. The crypto market tends to swing either way over time. If you gain a profit, you may withdraw it or reinvest it.

Tips to help you invest safely

• Crypto scams are on the rise. Scammers sometimes ask for payment in Bitcoin or deliver unsolicited proposals to help you make money or expand your holdings. Always do your own research before investing.
• Most cryptocurrency exchange platforms offer hot wallets to secure your holdings. Since they are online, wallets are susceptible to hacking. Ensure that the platform you are using has a robust security system in place. Look for two-factor authentication (2FA) and cold storage options.
• You could also purchase your own cold storage. But it comes with risks like losing your investments if you forget your password.

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