3 Common Mistakes People Commit when Trading Bitcoin

Bitcoin is a very special asset and attracts a special class of investors. While many tend to be tech-savvy, not everyone comes from the financial world, and it’s often reflected in their decisions. Bitcoin’s movements can also be very mysterious to the layperson, which could also lead newcomers to make wrong assumptions. Let’s take a look at some of the most common mistakes people make when trading bitcoin – and how to avoid them.

Buying High and Selling Low

One interesting thing about bitcoin is that many people seem to stand on the sidelines and invest when it hits a psychological mark, like $10,000 for instance. The funny part is that many of those who bought bitcoin at a much lower price or long-time holders looking for a way out may also have this mark as a strategy. Bitcoin then drops suddenly and those who came in start panicking and swearing off bitcoin. And the cycle continues.

Being Emotional/Religious

Many people invest in bitcoin for ideological reasons. They see bitcoin as this tool to overthrow the current global financial order. To them, bitcoin is and always will be the best and often only crypto. These are often those who believe in holding bitcoin no matter what when they could be hedging their bets instead.

On the other hand, you have those who are in for a quick buck. They’re waiting for the next rally and think that every spike is the “big one”. These people usually end up panic selling.

In reality, bitcoin should be part of a well-stocked portfolio that contains traditional and non-traditional assets. There are also other coins outside of bitcoin. So don’t be too emotional or attached to bitcoin and see what’s going on in the world of crypto at large.

It would also be wise that you have a tool that allows you to check the price of bitcoin in real-time. Sites like Chaingers allow you to see the bitcoin street value fast and easily. It allows you to compare bitcoin street value against the US dollar, which makes it a great resource if you want to unload some of your coins. What makes them different is that they track peer to peer exchanges, providing an up-to-date bitcoin street value, which gives you a more realistic idea of how much you can get if you want to trade your bitcoin on one of these.

Being Unfocused

While we mentioned that it’s always better to look at what’s going on with other cryptocurrencies, you must stay focused. You can’t start investing in 20 cryptocurrencies at once. Not to mention that pretty much all cryptocurrencies’ values are pegged to bitcoin. Only pick a handful of cryptocurrencies and don’t just look at the charts. Look at the projects, the support they’re getting from insiders, use case, and potential.

Bitcoin can be a great investment if you’re savvy and come with a strategy. So, before you do so, make sure that you actually know what you’re doing and learn as much as you can about it and other cryptos.