Bitcoin stands tall in the long list of cryptocurrencies that continue to change the nature…
The much Bitcoin to safely Hold Safely in Your Digital Wallet
Each passing day, new cryptocurrency investors join the fray by ambitiously buying some of the best performing cryptos in the market. These new entrants inject new blood into the evolving field of cryptocurrency and show that despite the stormy seasons that crypto has experienced, there is still a good lot that has trust in it. Over and above the exuberance of investing in cryptocurrency, there is a question of safety.
In recent times, there have been so many cases of cryptocurrency fraud that raises the alarm among investors. Even those who cautiously handle their cryptocurrency wallet keys still remain highly on the alert just in case someone snoops and makes away with a lifetime investment.
Crypto investors should always know this
When you are a crypto investor, one of the most fundamental things to consider is how much to keep at any one time and in what ways. Ideally, the cryptocurrencies do not have the traditional security like money stored in the bank accounts. In this sense, the safety of your cryptocurrency is your responsibility as an investor. As anyone can rightly guess, the more cryptocurrency gains popularity, the more fraudsters and scammers also up their game. They will always try to break through your wallet and send you back to the paupers.
As much as cryptocurrency is so coveted, one of its alarming downsides is that full responsibility remains in the hands of individual investors. There is no help center which you can call and ask for reversal of wrongfully done transactions as well as complain for losing money. Most likely, the moment you lose access to your currency, it is gone and it is unlikely that you will be able to retrieve it. Since its inception in 2009, it is estimated that more than 3.7 million Bitcoins have been lost.
Alarming losses of bitcoins that should prick investors’ consciousness
As a Bitcoin investor, you have a number of options through which you can keep your coins. Some of these options include the hardware devices, and even simple pieces of paper. As soon as you are familiar with the functionalities of each storage option, you can choose a wallet(s) that you feel will keep your coins safe. Although Bitcoin experienced more than a significant surge in the last three years of 2019, 2020 and 2021, a number of hacking events have been revealed.
Moreover, because the majority of the investors are also unfamiliar with the system, and may not know how to keep their currencies safely, they have been susceptible to hackers, who come with inventive mechanisms of stealing funds from them.
Sadly, some of the hacking activities have taken place in plain sight of the investors who are rendered helpless. You should therefore understand how you could safely store your crypto in the wallet. Before you know how to keep your funds, it is important to know how much you can hold in your wallet at any given time.
How Much Bitcoin is Safe to Hold in Your Wallet?
There is no specific answer for you here. Before you make any crypto investment into your digital wallet, it is important to consider some of the most basic concepts that govern investing. Firstly, you should only endeavour to invest the amount you will not regret losing. On a broader sense, you should never go for a loan if you want to invest in Bitcoins.
Advisably, therefore, you should invest in Bitcoin somewhere ranging from 5% to 30% of your investment capital. More specifically, investing about 5% will be extremely safer for you than 30%. Financial experts say that the majority of investors sit somewhere between 15 and 30 percent.
The amount of Bitcoin to invest also depends on several factors such as your experience with the financial and investment matters, and your financial goals. For example, investors who have a background in gambling may feel particularly comfortable losing whatever they have kept in their wallets as certain risk are involved. In this sense, it is not a good idea to invest and keep 50% or more.
If you are still incredulous of investing into your first crypto, you can invest as low as $10 on any recommended cryptocurrency exchange or broker as you try to assess the amount of returns as well as the dynamics that exists within the industry. This way, you will amass a better understanding of what it takes to become a good crypto investor.
If possible, you can divide the budget you had and invest it separately over a given period. As part of your investment expedition, doing so will prevent you incurring any potential losses and consequently saves you money. At this point, it is even possible to re-evaluate your investment amount in future.
How to Store your Bitcoins in the Wallet
Keeping Bitcoin is no different from keeping cash in the physical wallets. The main objective in this case is usually to provide protection to your finances though. In the case of Bitcoin, you will use the digital wallets to keep or store your coins. The digital wallet can be web-based or hardware based. Broadly, this hardware can reside within a mobile device or desktop protected with private keys. You will be required to print the keys and addresses utilized to have an access on paper.
The safety of these digital wallets depends on how you manage it. Meaning, if you improperly manage your wallet, you are most likely to lose it forever. You will be able to use your secret private keys to access your currencies. Otherwise, the moment your private key is lost, stolen or leaked to a third party, then you will lose your coins.
It is also possible to lose the Bitcoins when the computer that resides the wallet malfunctions, is lost, or stolen. Always ensure that your computer is in its perfect working conditions to avoid the unforeseen glitches that can otherwise preventable.
Factors that should guide you how much Bitcoin is safe in your wallet
As I have explained earlier, cryptocurrency investment can be a challenging decision if you do not know about their functionalities. I have simplified it for you by offering few recommendations and the factors to determine the amount to invest and keep in Bitcoin wallet. Consider the following:
1. Risk Tolerance
Bear in mind that virtual currencies are highly volatile. In fact, Bitcoin investment is all about taking risks in the midst of such volatility. While you think of how much you can invest, also think how much you are willing to discard. Large bitcoin investors are sometimes subjected to panic sales as they may decide to accept the losses depending on the prevailing conditions within the global financial systems and market.
2. Return Tolerance
Imagine waking up one day gaining more than 30 times your investment value, how does it feel? What if you wake up one-day upset after losing your cash, how will you feel? Some of the Bitcoin investors in 2017 became millionaires and some billionaires. However, things became completely different in 2018 when the currency set some of the lowest values since its launch. You are likely to stay strong as an investor when you gain more or lose less depending on the prevailing market situation.
It is extremely important to consider that crypto investments do not relate to any other markets such as gold, finance or real estate. As in the case of gold whose value rises when the stock falls, Bitcoin thrives without any dependence. As such, Bitcoin investment can be a good option for you, but always bear in mind that volatility still exists.
It is fascinating how the topic of Bitcoin has gained momentum among people looking for a financial gain. Majority of people understand the importance of bitcoin’s financial growth. There is also a surging interest in investment, which is also related to the demand of Bitcoin.
The amount of Bitcoin to invest also depends on several factors such as your experience with the financial and investment matters, your financial goals and your perceptions on risks involved. For us, we advise that you can invest as low as $10 on any recommended cryptocurrency exchange or broker as you try to assess the amount of returns as well as the dynamics that exists within the industry. However, 5% to 30% of your investment capital can be a good bet.