Today, Bitcoin is the largest crypto asset, both in terms of value and number of users. In recent years, the value of Bitcoin has continued to show a significant increase. In June 2017, Bitcoin was trading at around US$2,900. 5 years later, in June 2022, 1 BTC is worth around US$30,000.
Bitcoin investment is considered quite profitable in the long term. So, don’t be surprised if Bitcoin investment is getting more and more popular lately. However, please keep in mind that like most crypto assets, the price of Bitcoin is volatile. So if you look at price movements in the near future, such as a matter of weeks or months, it turns out that the ups and downs are quite significant.
Bitcoin is a profitable asset in the long term
Bitcoin investment is sometimes unpredictable when it will go up or down. So, don’t be easily tempted by big profits in a short time. This often makes investors, especially beginners, make emotional decisions that lead to big losses.
The risk of loss actually exists, regardless of the investment instrument. However, you can prepare a plan to minimize the impact of these losses. You need to set a limit on how much funds will be used for investment. Before starting to determine how much money you will invest as capital, try asking yourself this question: ‘if the worst case scenario is that I lose and my investment funds are lost, how much money will I be willing to lose?’
Use cold money to mitigate risk
Of course, the amount of money should not interfere with your living expenses. For that, you can invest with cold money. Cold money is the remaining unused funds, after all your income has been deducted by important items. For example, the cost of living, savings, installments, repayment of debt, and other basic costs.
Assume you have a monthly income of $500. After deducting food, transportation, monthly rent, savings, and other expenses, your salary is $350 left. All you can use for investment is the $350. As much as possible, do not get more than that amount.
If you take investment funds from basic necessities, you are worried that you will experience difficulties if your investment loses. For example, you have funds of two million rupiah to pay rent. Then, you try to play with prizes using one million rupiah from these funds for Bitcoin investments, in the hope of making a profit.
As it turns out, in the next month the price of Bitcoin drops and your investment fund is now only $200. As a result, you have to rack your brain again to add to your lack of rent money in the next month. Therefore, you should avoid investing using money that will interfere with your basic needs.
Small capital investment? No problem!
If you are worried that your money will be used for other things that are not classified as basic needs, another way to work around this is to set aside some money at the beginning. First, calculate how much you need in one month. If there is still some left, then take some and secure it as an investment fund.
What if you only have a small amount of money left? Don’t worry, you don’t really need big funds to invest in Bitcoin or other crypto assets. Little by little but consistent, then over time you will be able to enjoy the results. Moreover, there are now many crypto exchange platforms that allow you to start investing with small capital.