Chocolate gold coins overflowed onto the floor and the Catch Me If You Can DVD was waiting patiently inside of the player. After the screening, my friends and I spent hours dreaming up ways to make a little extra money—obviously not how the film portrayed, and not for the sole purpose of flying first class and ordering caviar at every restaurant we visited—but to at least provide us with some cushioning to fall back on if life ever dealt us some unexpected cards. That’s when it came to me: bitcoin!
I’d previously heard the term “bitcoin” mumbled from the lips of my technologically and economically-aware friends. I, however, ignorantly came to the conclusion that it was just one of those fads that would eventually die out, like Pokémon GO or “planking.”
I’m not sure if it was the sugar-high or what, but I decided to give it a go. I obviously didn’t want to jump straight in without an appropriate level of understanding, so I took each stage slowly and carefully to avoid making any major financial blunders.
Here’s what I did:
First, I decided to head over to my neighbor Bernard’s home. As I entered, I was met with the sight of a brightly-lit, sparkling new laptop sitting on top of the benchtop. On closer inspection, I witnessed the rising and dropping of tiny little numbers and as I predicted, a cryptocurrency exchange URL at the top of his browser. You’d think he’d have his internet “zoom” function set to at least 150% considering his eyesight issues, but regardless I knew I came to the right place for information.
I spent the afternoon with him to ensure I understood the cryptocurrency world as much as possible and came to learn the following:
- Many cryptocurrencies are decentralized systems with no single authority in control.
- It’s possible to open a bitcoin IRA.
- Exchanges are companies that facilitate your trading.
- Your cryptocurrency is stored in a digital wallet.
- You can use bitcoin to purchase physical and online items.
He explained in detail the different strategies people took, from “scalping” to “buy and hold” trading. When comparing short-term and long-term investing, however, I came to the conclusion that constant daily monitoring and quick reflexes wouldn’t suit me and could potentially lead to a severe sleep deficiency—and a dependency on energy drinks—that I couldn’t afford. Instead, I enthusiastically chose the long-term technique as it seemed to remove me a bit from market-fluctuation-chaos. (1)
2. Choose a cryptocurrency exchange
It was time to get serious (*gasp*) and choose an exchange that would offer optimal protection over my assets. There was an excess amount to choose from including:
- Binance. (2)
They each presented their own pros and cons regarding user experience and security. I made my choice based on what seemed to offer the most extensive features and ease of use.
Once I joined the exchange, I set up my digital wallet, hooked it up to my bank account and was ready to go.
3. Decide upon my investment amount
Bernard was very adamant for me to remember one thing—to only invest an amount that wouldn’t cause me devastation if I lost it. After careful consideration I decided to buy one bitcoin as the price it was on February 3rd, 2017: USD$1,020.09. (3)
4. Wait patiently
I checked on my little bitcoin every now and then, tried not to worry when the market dropped and to remain calm when it skyrocketed. My plan was to leave it untouched until it reached at least USD$250,000. This may have been perceived by others as a tall order to fill, however, today, bitcoin is worth just over USD$49,655.10, and is only predicted to increase.
Bitcoinprice.com revealed a collection of “bitcoin price predictions” by some of the currency’s top evangelists. One guessed that by 2022 the worth of a bitcoin would reach up USD$318,000. Others prophesized USD$500,000 in 2030 and a hefty USD$1 million by 2037. While predictions like these may not pan out, I’m excited to see what happens in the coming years. (4)
Benefits of long-term investing
Some people enjoy the market chase, however, others—such as myself—find more value in investing for the long-term.
Some benefits I enjoyed regarding bitcoin as a whole included:
- Potential for high returns
- Lower inflation risk.
Possible disadvantages included:
- Volatility of the market
- Possible online security threats (hacking).
Once I decided to dive into some extensive research, I never looked back. My long-term investment is still safely sitting in its wallet, and although I didn’t make quick returns when first investing with a short-term approach, I feel financially successful now, seeing how far I’ve come not only in the value of my bitcoin, but in the knowledge I’ve acquired.
- “A Beginner’s Guide to Cryptocurrency Trading Strategies,” Source: https://academy.binance.com/en/articles/a-beginners-guide-to-cryptocurrency-trading-strategies
- “Best Crypto Exchanges,” Source: https://www.investopedia.com/best-crypto-exchanges-5071855
- “Bitcoin Price | BTC Price Index And Live Chart – CoinDesk 20,” Source: https://www.coindesk.com/price/bitcoin
- “Bitcoin Price Predictions (2021 Updated),” Source: https://www.bitcoinprice.com/predictions/