Should You Buy Bitcoin?
What to know before buying bitcoin.
Bitcoin is a revolution in finance and technology.
Prices and speculative investing aside, should you buy bitcoin? And, if so, how much bitcoin should you own?
Before you decide to buy any amount of bitcoin, you need to know some basic info about the world’s largest cryptocurrency.
Bitcoin Is About More Than Money
Bitcoin is partially the peer to peer digital cash that its creator, Satoshi Nakamoto, wrote about in his white paper.
It’s also a type of digital gold as people do treat bitcoin as a store of value. Bitcoin has proven effective as a store of value.
BUT, bitcoin is about more than just money and storing wealth.
Bitcoin is both a form of digital currency and a store of value AND also much more than any of that.
You won’t get rich just because you buy, earn, or own bitcoin.
If you bought bitcoin years ago, you might’ve lucked out and struck it rich. If you’ve gotten into it in recent years or have attempted to trade it to increase your stack or profits, you might’ve made some money here and there.
Odds are, however, that you are not among the chosen few who are now wealthy because they own bitcoin. AND THAT’S OKAY.
Bitcoin is about more than just money. The community consists of traders and HODLers, but also techies, and folks interested in politics, philosophy, and much more. Plus, a lot of the community is looking at ways we can apply learnings from bitcoin to areas beyond currency.
Truly being part of the community and being involved in bitcoin requires more than just an interest in earning money.
It means that you are aware of the current state of traditional banking, fiat currency, and the impact that governments can have over these.
It means that you have made a conscious decision to take back some ownership over your personal finances and wealth.
And, you might also realize that the concepts that bitcoin has brought forth will ultimately go far beyond money.
Currency is just the first application of bitcoin.
So yes, bitcoin is money, but it is about much more than that.
The reason bitcoin continues to rise in price and strengthen its use case as a store of value is due directly to the current state of the economic and monetary system.
Bitcoin will go parabolic because the legacy banking and monetary system continue to debase fiat currency.
Bitcoin is the money the world needs more now than ever before and it’s fitting that it was birthed in the immediate aftermath of the 2007–2008 financial crisis.
Bitcoin is a hedge against the current system.
HODLing Is a Real Strategy
The percent of bitcoiners who HODL continues to grow.
What does HODL mean?
“HODL” just means hold. In 2013, one bitcoiner incorrectly spelled the word “holding” when referencing his investing strategy. That strategy… was more or less non-existent and he was posting online in a panic.
With his inebriated post about HODLing, the strategy of going long bitcoin was born.
As of early 2020, data showed that close to 60% of bitcoin had not moved wallets in almost a year. On top of that, nearly 50% of bitcoin had not moved in two years!
We’ve also starting seeing the number of bitcoin wallets holding one or more BTC continue to rise. This number will only increase as more institutional and large buyers get involved in bitcoin.
Despite volatility in price, a growing number of bitcoiners continue to HODL. Nearly 50% of all bitcoin hadn’t moved in two years as of mid 2020.
If you’re interested in buying bitcoin, you’re likely interested in also growing the amount of BTC that you own.
Many people dollar cost average and automate how they buy the cryptocurrency over time to reduce the impact of large swings in the markets.
This is a common strategy and one way for HODLers to continue stacking sats. If you don’t have a strategy, it’s time to think about developing one and sticking to it.
Storing Your Bitcoin Should Be Simple
Pick a wallet provider that you know and like.
There’s a lot to choose from.
You’ve probably heard the phrase, not your keys, not your bitcoin. That’s essential when it comes to storing your bitcoin.
If you keep your coins on a cryptocurrency exchange that doesn’t provide you with a wallet with private keys, then you do not own that bitcoin.
Find a wallet that provides you and only you full access to your crypto assets. You can purchase the bitcoin on the exchange. It’s convenient and most are becoming more and more reputable as time goes on.
Once you’ve bought your bitcoin, it’s not a bad idea to transfer it to a wallet that you have full access to.
Not your keys, not your bitcoin. Repeat this mantra until you’ve setup a wallet and memorized your private keys.
If you plan to HODL, don’t overcomplicate the process.
Implement a set it and forget it strategy.
Transfer any bitcoin you purchase or receive elsewhere to your wallet and leave it there. Your wallet provider will also likely give you a 12-word recovery phrase in the event you are either locked out or forget a password.
Write your 12-word recovery phrase on a piece of paper and store it somewhere safe.
Don’t leave your recovery phrase or private key anywhere online.
Keep it offline and get creative with how you store it but don’t overcomplicate the process. Make sure you can remember how and where you keep your private keys or recovery phrases.
Conclusion — Key Takeaways
In short, bitcoin is about more than just money.
But, because there are financial incentives for accumulating more bitcoin, learn how to HODL and store your coins.
Because we’re seeing more and more bitcoin sit in wallets for longer periods of time, the community appears to be bullish in the long term.
Some even predict that one bitcoin will reach $1 million soon.
No matter you’re feelings on the future price of bitcoin, your strategy is important. If you’re buying bitcoin, you ought to take it seriously. Educate yourself in the space and get involved in the crypto community.
Thanks for reading! I am not an investment or financial advisor. This is not financial advice. All opinions expressed are mine alone. If you want more content like this, sign up for my weekly email.