Smart investors typically have a system for their investing. It’s typically based on market trends, prior performance, and a healthy mix of short and long term goals. But bitcoin is a relatively new player on the investment landscape, and many investors struggle to understand how to determine the best times to buy, sell, or HODL (hold on for dear life).
As a premier bitcoin banking and investment platform, we’ve seen our share of strategies, and have the experience to be able to offer a few best practices and things to consider to help you develop yours. Of course, every investor is different, and while we’d always recommend holding for a little while longer, we understand that for some, that’s just not plausible. For those who are looking to move their bitcoin or other cryptocurrency around more often as the market fluctuates, there are a few things to keep a keen eye on.
With BTC, market fluctuations are par for the course.
With traditional fiat currency models, many investors rely on average trends to decide the best time to buy or sell. Whether it’s a historic percentage increase or quarterly gains for the last eight quarters, there’s some predictability when it comes to fiat. With BTC, assessments must be made differently. There are a few known factors — like the fact that as bitcoin continues to grow in popularity, it will almost definitely increase in value — but much of the month to month data fluctuates with supply and demand in the market at any given time. For instance, if we look at January 1, 2017, we’ll see that BTC traded at less than $1,000. By the end of December, bitcoin was trading at a whopping $19,000+. There’s no predictability scale for that!
The best practice for predicting the best times to buy would be to consider monthly fluctuations, and buy when the market is at its lowest of the month. Predicting where the market will turn in a week or two is much easier than predicting its location in months. On the other side of the coin, if you’re looking to sell and don’t want to hold out indefinitely, wait for a peak price that isn’t too far away. It isn’t always advisable to plan to hold for a year or six months, and then sell, because there’s no way to know where the BTC market will be at that point. Of course, investing with a bitcoin term deposit program that guarantees returns at the end of term can also be a great way to ensure you have more bitcoin to sell whenever you’re ready to do so.
Your don’t need tons of BTC to enjoy great returns.
Unlike investing in fiat currency, where you typically need to invest a good deal of money in order to really make the most of any returns, bitcoin returns can be exponential. If we take the 2017 example, the increase in return for a person who bought in January and sold in December would have been over 1,000%. That means that even a dollar invested would have been worth over $1,000 in less than a year’s time. While we are big fans of holding onto bitcoin for as long as you can, it wouldn’t be fair of us to leave out the fact that there is ample opportunity for major return in a short period of time, if you read the market correctly. The best practice here is to buy an amount of BTC that you can afford, and deposit it somewhere that will help it grow until you see it’s ideal to buy. If even a $1 investment can return at 1,000%, imagine what an investment worth 10x that thanks to an aggressive term deposit plan could do for you!
There is no universal “best time to sell.”
When and how you sell your BTC is entirely dependent on your unique situation. As mentioned earlier, some people buy bitcoin with the sole purpose of holding onto it for as long as they can. For others, they’re looking to get in on the market while prices are lower, then make an exit as soon as the price hikes up. There is no one size fits all solution to bitcoin selling strategy. The biggest thing to remember is the fact that market fluctuations are more common, and can lead to larger rewards down the line than fiat currency traditionally does — and that the best way to ensure your BTC continues to grow as you wait to sell is to deposit in a free term deposit plan that guarantees BTC interest.
At BitLeague, we offer a number of 100% free, no fee term deposit plans designed to fit our customers’ needs. See which one is right for you today!