When Is the ‘Best Time’ to Buy Cryptocurrency?
You may be buying cryptocurrency for many reasons: for spending it, donating it, gifting it. The only problem you are facing though is when you should buy it.
This depends on many factors, but you can still determine it nonetheless. Here’s how you can do it.
First, remind yourself which cryptocurrency you will be buying or choose one if you haven’t decided yet. Here are the most popular types of cryptocurrency to choose from:
- Bitcoin: Abbreviated as BTC, Bitcoin is probably the most popular of all the cryptocurrencies. You can purchase it almost anywhere.
- Bitcoin Cash: Abbreviated as BCH, Bitcoin Cash was only launched in 2017 and has since become pretty widespread.
- Litecoin: Abbreviated as LTC, Litecoin is only two years younger than Bitcoin and is quite well-known as well.
- Ethereum: Abbreviated as ETH, Ethereum could be primarily found on the platform of the same name.
There is no right or wrong cryptocurrency to buy, so consider all your options and make a choice you will be satisfied with.
Why are you buying it?
The next thing you should do is think of why you are buying the cryptocurrency you chose. Consider what you will be doing after you purchase the cryptocurrency. Are you going to sell it? Or maybe you will be donating it or gifting it to someone?
This point is very important as it will decide your further actions. You must know what goals you are pursuing so that you can find the best means to achieve them. Besides, some cryptocurrencies might have technical restrictions that will prevent you from doing what you want to do.
Remember that the cryptocurrency market is constantly evolving and changing. For instance, there’s this new concept of stablecoin being developed that may be the next big thing in the world of cryptocurrencies.
“Stablecoin initiatives are developing at a rapid pace. Adoption of stablecoin, a form of collateralized cryptocurrency pegged to a stable fiat currency like the yen or dollar are being debated by central banks,” says Robert Anazalone, an expert on cryptocurrencies.
What is your financial situation?
You are probably aware that some cryptocurrencies are more expensive than others, so if you are on a budget, you probably won’t be able to buy them. You have to take into account your financial situation before going online and looking for your cryptocurrency.
“Due to the limitations placed on capacity, cryptocurrencies like Bitcoin and Ethereum see higher transaction fees when the networks become congested,” writes Kyle Torpey, a writer and a specialist on Bitcoin, in an article for Forbes.
At the same time, this point is directly tied up with the next one as the current state of the market will influence the price of your chosen cryptocurrency. Sometimes, even a usually cheap currency may cost more due to the fluctuations in the market. This can also influence what you will be buying and when.
What is the current state of the market?
Last but not least, think of the current state of the market. Research and read about what is going on so that you are aware of the situation and clearly know what you are doing. Analyze the data you collect and decide whether or not it’s the right time to buy cryptocurrency.
You should be conducting such research and analysis regularly so that you can determine the best time for buying your chosen type of cryptocurrency.
Clem Chambers, the CEO of private investors website ADVFN.com and author of Be Rich, The Game in Wall Street and Trading Cryptocurrencies: A Beginner’s Guide, says: “Market timing is incredibly difficult, especially in a hugely volatile asset like bitcoin.”
To sum up, try to be skeptical of what you read online when someone is claiming that it is the right time to buy cryptocurrency. Read and research or seek help from a professional adviser to understand when is the right time to buy and which cryptocurrency to choose.
This was authored by digital marketing executive Cynthia Young .