3 Signs You Are Ready To Invest In Bitcoin!

3 Signs You Are Ready To Invest In Bitcoin! It would be an understatement to say that Bitcoin (CRYPTO: BTC) has skyrocketed in the last few weeks. The leading cryptocurrency was around $ 50,000 at the time of this writing, and despite some fluctuations, it continues to see record highs so far this year. In addition, Tesla made the headlines when CEO Elon Musk announced that he would buy $ 1.5 billion worth of Bitcoin, fueling the rapidly rising price of the cryptocurrency.

1.You Must Be Ready to Take a Higher Level of Risk

Despite its price rise and popularity for many investors, Bitcoin is still an incredibly volatile investment. Bitcoin, which has experienced wild price fluctuations over the years, has seen times when it lost about 80 percent of its value from time to time. It has seen two steep drops even in the last two months. If you are going to invest now, you need to make sure you can tolerate these intense price fluctuations. Not everyone has a helmet for such fluctuations, so consider your risk tolerance before investing. If you invest in Bitcoin today and it drops 20 percent tomorrow, or drops 50 percent, or worse, 80 percent, will you still be able to sleep at night? Knowing your limits can help you decide if Bitcoin is the right investment for you.

2.You Should Have a Diversified Portfolio

Regardless of your investment strategy, it is always wise to have a properly diversified portfolio. With an investment as volatile as Bitcoin, this strategy is even more important. Note that there is no data on how Bitcoin will perform. This means you'll need other options to return if things get worse. There are several ways to create a diversified portfolio. And each of these can reduce your overall risk:

• -Invest in index funds: Having a basic portfolio of index funds can significantly reduce your risk. When most of your savings are spread over stocks, you won't lose anything even if Bitcoin goes negative.
• -Invest in a variety of industries: If you choose to invest in individual stocks, try investing in companies in multiple industries. Even if you are investing in a dozen stocks, make sure that they are not all from the same industry. If you are investing in Bitcoin, you want your core portfolio to be as stable as possible.
• -Stick to well-established companies: Having a portfolio full of stocks that are very likely to perform well can reduce your overall risk. There is no rule of thumb as to how diverse your portfolio should be.

If you're investing in a wide variety of solid companies that can withstand the rigors of time, you might be ready to add Bitcoin to your portfolio.

3.You Can Make a Long Term Investment

One of the best ways to make a lot of money in the stock market is to buy solid investments and hold them for as long as possible. The same is true for Bitcoin, so you should consider how willing you are to wait a long time to see significant returns. If you think you might be stuck in money and need to sell your investments in the next few years, it may not be the right time to invest. However, if you can keep your deposit for at least five to seven years (or more), you can be ready.

As Warren Buffett said, "If you don't want to own a stake for 10 years, don't even think about owning it for 10 minutes."

Bitcoin is not the right investment for everyone, so make sure you make this decision carefully. If you already have a healthy portfolio and are willing to take calculated risks, investing in Bitcoin can be a wise choice. Otherwise, you may want to stay away from it for now.     Source: https://www.fool.com/

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