Should I invest in Bitcoin in 2021?
In the past, those who bought bitcoin and held on to it for at least five years saw exceptional returns. Buying Bitcoin in December of 2015 would have cost you $400, whereas selling it five years later for $28,828 would give you a gain of 72 times that, or 24,860%. It is not possible for the stock market to perform like this. For investors, Amazon represents a 5-fold increase in the stock market. There can be no doubt that Bitcoin has performed exceptionally well throughout the decade.
It’s impossible to buy Bitcoin if you aren’t completely ready for it. Buying when Bitcoin is expensive is risky because the price can quickly decrease. If, for instance, you had purchased one Bitcoin in December 2017 at a price of $19,223, you could have sold it in December 2018 for approximately $3,500, losing 82 percent of your initial investment. If you purchased at 19,233, however, you would have generated a 2.92 return on your investment.
For me, five years is a long time to invest in Bitcoin. If you can’t afford to hold on for that long, then you shouldn’t buy it. If you are in a situation where you are short on cash and must sell your Bitcoins, it is quite possible that you will not find a buyer when you need the money. What if someone deposited all of their savings into Bitcoin on December 2017, only to need the money a year later? If they had lost 80% of their life savings, they would have lost more than 82% of their savings.
Do not buy Bitcoin if you are not able to put aside an amount of money each month that is equivalent to at least one month’s worth of expenses.
It’s against your best interests to buy Bitcoin if you don’t have health insurance.
You shouldn’t buy Bitcoin if you have an upcoming large and predictable expense.
Do not purchase Bitcoin if you are not emotionally stable.
If you have to let go of your Bitcoin after only a few months because its value is depreciating, then you shouldn’t have bought it in the first place.
I first bought Bitcoin in 2018 when it was worth $10,000. It took the market three and a half months to return to the price it was at in June, and there was no substantial return on investment to be made until the end of the year. You need to be okay with the fact that there will be another bear market and that your portfolio will lose value if you are buying Bitcoin. Even during a bear market, if you can hold on to your coins, you could make considerable profit.
Take good care of your Bitcoins while you’re learning about them, and don’t sell in a bear market.