You Bought Bitcoin for the First Time? Great! Now, It’s Time to Define a Strategy and Stick to It
This is essential to take full advantage of Bitcoin.
You hesitated for a long time. Then, after hearing and reading that Bitcoin was a revolution with incredible potential for the future, you started to think. The third Bitcoin Halving caught your attention.
As the current monetary and financial system shows its limits as never before amid the economic crisis of 2020, you were surprised to discover that Bitcoin’s monetary policy was planned.
The Fed and other central banks can increase the money supply in circulation at any time on a simple arbitrary decision of a minority not representative of the people. In contrast, Bitcoin obeys only its source code.
The complete schedule for Bitcoin issuance has never changed since its creation by Satoshi Nakamoto more than 11 years ago.
However, this was not enough to make you buy Bitcoin. You needed something stronger. This thing is simply related to the natural greed of human beings.
The possibility of significant financial gain attracted you to buy Bitcoin
You read that Bitcoin was the most successful financial asset of the previous decade. Bitcoin turned $1 invested in 2010 into $90K by the end of 2019. A performance of +9,000,000% which had never been seen in the history of investment.
Between July 26th and July 28th, 2020, the Bitcoin price increased by almost 20%. In less than 48 hours, Bitcoin went from $9,600 to nearly $11,400.
Very quickly, the feeling in the Bitcoin world went from fear to extreme greed. The return of a FOMO feeling in the Bitcoin world has reached you. You are now afraid of missing The Next Big Thing.
This fear has driven you to take the plunge and buy your first Bitcoins.
I imagine that you made that purchase on a platform like Coinbase or Binance. You must realize right away that with Bitcoin, it is up to you to ensure the security of what you own.
I invite you to quickly buy a hardware wallet. Once this step has been completed, you will need to get your Bitcoins out of these trading platforms as quickly as possible and send them to your hardware wallet. From then on, your Bitcoins will be yours.
Never forget the golden rule of Bitcoin:
Not your Keys, Not your Bitcoins.
If you wish to join the Bitcoin club, you will have to follow this golden rule.
After that first purchase of Bitcoin, you don’t know what to do
After the excitement of buying your first Bitcoins, you are now asking yourself what to do next. Many people make a monumental mistake after that first Bitcoin purchase.
Instead of trying to learn more about the Bitcoin revolution, a lot of people will simply think that Bitcoin is just another financial asset.
They will leave their Bitcoins in a corner, without understanding that Bitcoin will change the world of the future.
Those who make this mistake are not going to define any strategy with Bitcoin.
Then, at the first sharp drop in the price of Bitcoin, you may panic. This often leads to the sale of your Bitcoins at any cost. A majority of beginners lose a lot of money this way.
This happened in 2018 when Bitcoin entered a strong bear market after its euphoric year-end in 2017 when its price had reached $20K.
You mustn’t lose sight of the bigger picture
Others will find Bitcoin boring when its price stagnates. These people let themselves be blinded by the ambient noise rather than see the real signal in the world of Bitcoin: the Bitcoin revolution is moving forward day by day. You just have to step back to see the bigger picture.
If you find Bitcoin boring, you’ll end up letting your greed take over. At that point, you might listen to those who tell you that their Altcoin is the next Bitcoin. Or you will listen to those who advise you to diversify in the face of the risk of owning only Bitcoin.
Keep in mind that greed is the number one enemy in the Bitcoin world. Only Bitcoin matters. Bitcoin is not a replaceable technology, because Bitcoin is money.
If Bitcoin were to fail, all Altcoins would fail. When Bitcoin succeeds in its revolution, the value of the majority of Altcoins will have reached zero. Diversification in the Bitcoin world is therefore a total illusion.
Define a strategy with Bitcoin, and stick to it
Once this is understood, you will be able to define an effective strategy to take full advantage of Bitcoin.
Here is the one I use, and that a majority of Bitcoiners follow to the letter:
- Buy Bitcoin automatically with a Dollar-Cost Averaging (DCA) approach. Many applications exist for this.
- Program the automatic sending of these Bitcoins to your hardware wallet using one of the applications you will buy.
- HODL Bitcoin no matter what.
- Iterate from step 1.
This simple strategy will allow you to become a Bitcoin HODLER. You’ll have an essential advantage over Bitcoin Traders: you’ll be able to lead a more Zen life, and more importantly, you’ll be able to focus on the essentials.
What I mean here is that you will have time to learn more about Bitcoin, money, and the economy.
It is by educating yourself that you can take care of your future when it comes to money. The economic crisis of 2020 has brought this essential reality to the forefront.
You may have doubts about this strategy that I have just unveiled to you.
If so, here’s a graphic to show you that this is by far the safest strategy to enjoy Bitcoin with confidence:
This graph shows you that HODLing Bitcoin has been a profitable strategy more than 97% of the time since the creation of Bitcoin.
So, signing up for the long-term with Bitcoin is a no-brainer.
The hardest thing will be to stick to your strategy with Bitcoin no matter what happens in the future. HODLing Bitcoin has been difficult at times so far. However, this is nothing compared to what you can expect psychologically in the months and years to come.
As Bitcoin will see its price skyrocket to constantly break its records, you should keep in mind that if you were to sell your Bitcoins, you would regret it sooner or later in the future.
Be strong, and stay a Bitcoin HODLER no matter what.
The Bitcoin revolution will take time, but if you have patience, you will be greatly rewarded when its price reaches heights that many thought were unimaginable when it was created.