Abioye Shinaayomi
It’s impossible to not know what Bitcoin is in the age and time that we live in. For Seven years since 2013, Bitcoin has been among the top ten most searched terms on Google. If that’s not an astronomical feat, I don’t know what is!
With millions of people joining the Bitcoin Bandwagon every year, it can be speculated that you’ve either at a point in time invested some of your Income into not necessarily Bitcoin but a Cryptocurrency or a Crypto token, or if you still haven’t, you must’ve thought about it and that should be precisely why you’re reading this article right now.
Well, you’ve come to the right place! In this article, we’ll be going over strategic ways to multiply your wealth in Bitcoin in 2023 and not a year later.
1. HODLing: Why “Hodling” Bitcoin for the Long Term is a Smart Strategy
Hodling? Spelling Error? Definitely Not! This is s simple term used in the Cryptocurrency space that refers to Holding Cryptocurrency or in this regard – Bitcoin for the Long term as the subheader implies. Now, there are usually two types of Cryptocurrency investors.
Those that perform day trading. This means they purchase cryptocurrency when the price of a particular digital coin is favorable to them and looks promising to increase at some time during a 24-hour period and then they sell when it reaches that point. Then there are the Hodlers who can hold a particular digital coin for days, weeks, months, and even years before selling it off to make a profit.
Both of these approaches have their benefits and demerits. Before Hodling Bitcoin for the long term, there are some boxes you’re going to have to tick.
- Understand Bitcoin as a Digital Coin
- Assess your Risk
- Choose a Secure Bitcoin Wallet
- Stay Informed
- Don’t crack before you reach your goal.
All these points were listed out deliberately without explanations because as someone ready to hodl Bitcoin in the long term, these are factors that should have crossed your mind and will be pretty self-explanatory as you peruse through each point.
Now, let’s get into the main question at hand. Why is “Hodling” Bitcoin for the Long Term a Smart Strategy? Simple! There are two main reasons why it’s a very smart strategy. For one, Hodling Bitcoin for the long term will allow you to ride out small short-term market fluctuations and you can then potentially benefit from long-term growth. Second, Bitcoin is the ONE digital coin that has shown its resilience and has many times, bounced back from downturns in the market.
2. Leveraging Bitcoin Futures
Leveraging Bitcoin futures is when you as a trader, use borrowed funds to boost your potential profits on a Bitcoin futures trade. For example, you can enter a Bitcoin futures trade with a leverage of 10x and this means that for every dollar you put in a trade, that trade is increased by $10 worth of Bitcoin. While this can get you higher gains, it can also increase your losses if the trade goes against you. It is very important for you to understand how Leverage works and functions as well as the risks before you enter a leveraged Bitcoin futures trade.
3. Staking: Earning Passive Income with Bitcoin
Staking Bitcoin involves holding your coins in a designated wallet and actively participating in the network’s consensus algorithm. This process helps to secure the network and validate transactions while earning rewards in return. It is becoming an increasingly popular way to earn passive income with Bitcoin.
There are lots of staking options available for Bitcoin holders, including centralized and decentralized staking. Centralized staking simply involves delegating your coins to a staking pool or service provider, while decentralized staking involves holding and staking your coins in a non-custodial wallet.
Before staking Bitcoin, it is very crucial to research and choose a reliable staking provider or wallet. You should also consider factors such as staking fees, the security of the staking service, and the potential returns. Staking Bitcoin can be a great way to earn passive income with cryptocurrency, especially in a market where traditional investment options offer low returns. However, it is important to approach staking with caution and only invest what you can afford to lose.
4. Dollar-Cost Averaging: A Proven Investment Strategy
Dollar-cost averaging is a very popular investment strategy that involves investing a fixed amount of money at regular intervals, regardless of an asset’s price. This technique will help to reduce the impact of short-term price fluctuations on the asset.
When applied to Bitcoin, dollar-cost averaging can be a pretty effective way to accumulate the digital coin over time while slowly reducing risk. By investing a fixed amount of money at regular intervals, you can potentially benefit from Bitcoin’s long-term growth while still reducing the impact of market volatility.
5. Diversifying Your Portfolio: The Benefits of Altcoin
A crucial component of investing, particularly when it comes to the unpredictable world of cryptocurrencies, is diversifying your portfolio. Although Bitcoin is unquestionably the most well-known and widely-used cryptocurrency, it’s crucial to take into account the diversification advantages of altcoins.
Any cryptocurrency that is not Bitcoin is referred to as an altcoin. These can include established currencies like Ethereum and Litecoin as well as more recent digital coins that are becoming more well-known. You could minimize the danger of putting all your eggs in one basket and possibly boost your total gains by investing in a number of cryptocurrencies.
Altcoin advantages go beyond diversification. Some alternative digital currencies, such as ones focused on privacy or those that support decentralized financial (DeFi) apps, have special features or use cases that Bitcoin lacks. Additionally, certain alternative currencies could be more affordable than others, making them more accessible to you if you have a tighter budget and still want good profit.
Conclusion
In conclusion, Bitcoin has become a mainstream investment option, and there are strategic ways to multiply your wealth in Bitcoin in 2023. The article discusses five such ways, including HODLing, leveraging Bitcoin futures, staking to earn passive income, dollar-cost averaging, and diversifying your portfolio with altcoins.
Each strategy comes with its benefits and risks, and investors should consider their goals, risk tolerance, and market conditions before making any investment decisions. As with any investment, it’s important to approach Bitcoin with caution and to only invest what you can afford to lose.
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