The novel coronavirus pandemic has impacted economies and societies at every level, and obviously investing in cryptocurrency. With everything that’s going now, it might have shown you some misses and opportunities to start building your finances, or even investing a fair amount in creating a safety cushion, in case another economy-hitting event ever happens again. Chances are, one of your considerations is cryptocurrency.
There are many reasons cryptocurrencies like Bitcoin (BTC) are perceived as an attractive investment. For one, they operate without the need for an intermediary like central banking and government entities.
With the world under quarantine, crypto serves as an excellent solution for sending or receiving payments digitally within seconds, which works for both international and domestic transactions. Plus, the transaction fee is a lot cheaper than foreign exchange markets where interbank fees apply. In 2019, a $1 billion single BTC transaction cost around $690.
Bitcoin during COVID-19
Bitcoin is the first decentralized cryptocurrency that has successfully cemented its status in the digital economy as a safe investment instrument. Much like the stock market, the cryptocurrency market is also highly volatile. Stocks experienced great dips during this pandemic, and so did Bitcoin.
However, interest in BTC has increased even more during COVID-19, and it saw a growing demand in other countries. Even renowned former Goldman Sachs fund manager Raoul Pal moved 25% of his portfolio to Bitcoin.
Just like with fiat currencies, crypto investors can also buy, sell, and perform cryptocurrency exchanges. As more and more people invest in cryptocurrencies, spending them can then become as popular and prevalent as the currencies that acquired the public’s trust.
Some tips on investing in cryptocurrency, like BTC, ETH
- Research. Bitcoin and crypto trading have been around for several years now. If you’re new to the market, you should study and understand how the cryptocurrency market works to help you make informed investment choices—for instance, the basics of buying and selling, market trends, trading signals, and properly storing coins. Like other investments, cryptocurrencies offer excellent opportunities, but they come with risks.
- Start small and observe. After spending some time researching, you may think you know enough about the industry to start trading or investing big. Digital currency is still a developing asset, so don’t rush into it. You can start by investing small amounts and observe how it performs before you increase your investment.
- Only invest money you can afford to lose. In tough times like a global health crisis, nothing is for certain. If you’re thinking about investing in crypto, make sure only to invest an amount you are willing to lose. Money is a daily necessity, not just during crises, because it will help sustain you. If losing the amount you plan on investing will affect your life, consider adjusting the amount. As mentioned above, start small.
Wrapping it up
If you believe that investing in BTC or other cryptocurrencies during these trying times can give you high returns, in the future and achieve financial freedom, make sure to research first before jumping head first into it. The pandemic has caused mass financial panic to people, and it’s only logical that you take the time you need to study the market to help you make wise investment moves.
Professional Stock Trader, Founder of Enlightened Stock Trading and Trusted Trading Mentor with Students across Australia, Asia, USA and Europe