7 tips for your first Bitcoin investment

Should you invest in Bitcoin or not?

Should you invest in Bitcoin? The current market environment could offer a good entry point. At least, if you know what you're doing. With these 7 tips, the odds of screwing up are lower.

A low Bitcoin price and a tense global economy invite investing. At least if you follow the basics of investing. And the market has always said:

"Buy when the cannons thunder. Sell when the violins play."

Old market wisdom

To help make your first Bitcoin investment a success, we’ve laid out some core principles every investor should know.

1. When do Bitcoin bulls come in? Spot the moments

In investing, there’s a distinction between rising and falling markets. In a bull market, sentiment is generally positive ("bullish") and prices rise. A bear market is when prices fall. Sentiment is usually negative or “bearish.”

Between these two moments there’s also the sideways market, where not much happens. Prices move with little volatility. But rising prices don’t necessarily mean it’s a bull market. Traditionally, a bull market starts when prices have risen at least 20% from the last low. Anything below that is considered a "rally".

A crash, on the other hand, describes a phase where prices plunge in a single swoop. If this happens during a bull market, it flips to a bear market after a 20% crash. If prices only dip briefly, that’s called a correction during a bull market.

2. Leave emotions out

FUD and FOMO aren’t friends of smart investing. FOMO (Fear of Missing Out) is the fear of missing something. That fear often leads to quick, ill-considered moves. You might put money into a project just because it’s trending right now. Not much time is left for your own due diligence.

FOMO tends to show up in rising markets. When Bitcoin’s price surges, it’s headline-grabbing: media outlets that rarely cover crypto suddenly report big gains. That pulls in inexperienced investors who want a piece of the action. If things go south, you get frothy markets or even a bubble – and if you don’t know what to do, you can lose part of your stake.

3. Don’t max out your budget

How do you avoid these predictable reactions? Never risk more money than you’re willing to lose. You should only invest money you won’t need in the next five to ten years. Money you rely on can be a FUD trigger. If you’re afraid of losing money, you’ll be tempted to chase every last bit you can save.

If you know you won’t depend on that money, you can ride out market phases. The rule is simple: those who endure have a better chance of hitting their goals.

4. Bitcoin on fire? Acknowledge it

You only realize losses when you actually sell. Even if your portfolio is in the red and the losses sting: as long as you haven’t sold, you haven’t realized a loss. So if the whole market is bleeding, it might be worth waiting a bit. Prices can recover. Selling in a down market is rarely a good idea.

The same goes for gains. When everything’s green and your portfolio’s exploding, it might be time to take profits. Sure, prices could keep rising, but crypto markets can swing down fast.

5. Find your strategy

First and foremost: there isn’t one right strategy that fits everyone. The magic formula isn’t found yet. But everyone can find their own approach. As preparation, you should clearly decide in advance when you’re investing, how much profit you want, and how much loss you’re willing to accept.

Investment checklist:

• How much do I invest, and over what period (day/week/month/year)?
• What’s the maximum loss I can take?
• Where do I set my limit order/stop loss order?
• How much profit do I want to make?
• Where do I place my sell order/target?

If you can answer these questions for yourself, you’ve already got a big edge over many amateur investors: certainty. Once you’ve set a minimum and maximum, you can act accordingly.

6. Stick to your strategy

To keep to your goals, you can use several safeguards. Most brokers and exchanges offer a stop-loss feature, where you set a price at which the crypto must be sold. There’s also take-profit. You set the desired price, and once hit, your coins are sold for a gain.

This saves you stress and, in doubt, money. By letting the platform handle trades, you’re not forced to stare at the market all day and can focus on other things.

7. Consider a Bitcoin savings plan

Dollar-cost averaging is one of the least stressful ways to play the crypto market. With this method, you invest a fixed amount at regular intervals, usually monthly.

As prices rise or fall, you get more or fewer coins for the same monthly amount. But over the long term, you build a solid portfolio. The core idea is that the average price smooths out the swings in the coin’s price.