Real Life Bitcoin Investment Strategies

In an earlier chapter we provided you with a lowdown on Bitcoin investing. In this chapter we will look
at some of the real life Bitcoin investment strategies that are working well for some savvy investors.

Many people are jumping on the Bitcoin investment bandwagon nowadays because of the price rises
but most of these people fail because they are ill prepared. They do not have the advantage of reading
a guide like this to help them like you do.

Throughout this guide we have made no secret of the fact that Bitcoin is a volatile digital currency and
it goes up and down in value on a regular basis. That is why we recommend that you adopt a long
term approach to your Bitcoin investing so that if the price does drop you give it time to recover.
So here we will take a more in depth look at some of the “real life” methods that successful Bitcoin
investors use to make a profit.

The Dollar Cost Averaging Method

We mentioned this briefly in chapter 2. This really is the best Bitcoin investment method for beginners
because it removes the need to enter the Bitcoin market when the timing is right. A lot of novice
Bitcoin investors spend a lot of time and really stress out waiting for the price of Bitcoin to fall to the
right level.

When you use the dollar cost averaging method for your Bitcoin investing you will spread your risk
over a time period. All you need to do is make purchases at regular intervals and then hold them in
your secure wallet.

Here is an example of how this works. Let’s say that each week you can spare $100 to invest in Bitcoin.
So you will make a purchase every week for $100 and some weeks you will receive more Bitcoins for
your money and others you will get less.

There is no need for you to study Bitcoin price charts for hours. All you need to do is have the
discipline to make those $100 purchases every week. You don’t have to wait around for the right price
drops just make your purchase anyway.

When you use the dollar averaging method you will find that your profits average out when you
decide to sell. You might not achieve huge profits using this method but if you sell when the Bitcoin
price is high then you will still make a good return.

Investing a Lump Sum into Bitcoins

This method is definitely not one for the faint of heart but we want to cover all bases here. When you
invest a lump sum in Bitcoins you will purchase them at a specific price point. There is an element of
risk when you do this.

Let’s assume that you have $50,000 to invest. Naturally you want to get as many Bitcoins as possible
for your investment. In order to have the best chance of doing this you have no choice but to wait
until the Bitcoin price goes down.

There is no other alternative here. You must wait and time your entry into the Bitcoin market as well
as you can. The problem is that in practice the price of Bitcoin fluctuates very often so predicting the
next price dip is really tough to do.

If you have a lump sum to invest right now we wouldn’t advise that you start with this. It takes
experience to make a good judgment of the right price dip. Even the experts get this wrong
sometimes.

When you are new to Bitcoin investing and want to invest a lump sum you may see a price dip and
then think to yourself “if I just hang on for a while it may go down even more” or “what if the price
never reaches my low point?”

The same scenario applies to selling your lump sum investment. How do you know the best price to
sell your Bitcoins for? It may be very difficult to sell at the price that you need to make the profit you
planned for.

If you sell too soon and the price goes up even more then you will criticize yourself heavily. Think what
you could have done with all of that extra profit! Obviously a lump sum investment will provide you
with a much higher profit than the dollar cost averaging method if you get the timing just right.

Bitcoin Investing Hedge Fund

You may not be aware of this but there are actually cryptocurrency hedge funds available that include
Bitcoin. This could be a good alternative for you if you do not want to learn about Bitcoin investing
that you will need to do if you want to use other investment strategies. The biggest drawback with any
hedge fund is the expensive performance and management fees.

Cryptocurrency hedge funds will insist that you pay the management fee upfront. Usually these fees
are in the region of 2% of your investment so if you want to invest $100,000 then you are going to
have to pay around $2,000 as a management fee which leaves you with $98,000 for investing in
cryptocurrencies.

You will be appointed a hedge fund manager and they work on a profits percentage basis. This can be
as high as 20% so if you were able to secure a $40,000 profit from your investment then you will have
to pay $8,000 to your hedge fund manager.

These figures may startle you and cryptocurrency hedge funds are not going to be everyone’s idea of a
good thing. But when you think about it you will have totally hands off investing here which can make
big profits for you.

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