3 things to do after your first Bitcoin purchase

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Most first-time crypto buyers are wondering whether or not to buy Bitcoin (CRYPTO: BTC). But when you pulled the trigger to buy BTC, you probably weren’t counting on the constant and lingering worry about what to do next. Before you start obsessively checking prices or buying every token in sight, check out three game plans that could help you make your crypto journey a success.

Path # 1: emulate Elon

Bitcoin has had a roller coaster year, and volatility is no stranger to the situation. Expect more of the same in the months to come. But seen in the longer term, its rise has been meteoric. With fiat inflation on the rise everywhere and the state’s attempts to create alternatives to digital money accelerating, some advisers believe Bitcoin will become a serious hedge against rising prices.

Tesla (NASDAQ: TSLA) and its crypto-loving CEO Elon Musk have taken an unusual approach to their Bitcoin investment. While its purchase of 1.5 million BTC in February may have sounded like a long-term investment strategy, it is not what the company said. Tesla says it wants to use Bitcoin as a source of short-term cash – and true to its word, when Tesla needed cash to fund its projects in March, it sold a small percentage of its BTC holdings at a favorable price.

Image source: Getty Images.

Central bankers like Fed Chief Jerome Powell and tech gurus like Square CEO Jack Dorsey refer to crypto as “a substitute for gold” or “a promising candidate for the Internet’s native currency. “. Many people think the best thing about crypto is the fact that coins are an exceptional store of value – a tool that could counter the forces of inflation, in the words of Argentine President Alberto Fernndez.

Not everyone has Tesla or Elon money to spend. But you could try to do the same on a more manageable scale with your own funds, especially with inflation on. Maybe BTC could help you with your own cash flow needs. Let it sit in your wallet and build up value until you need to break the bank.

One thing to keep in mind if you adopt this strategy, however, is that during times of high market activity, Bitcoin’s transaction fees can reach prohibitive levels. But most wallets and exchanges will allow you to verify transaction fees before converting your coins to cash. Try to check the fees at different times of the day: Sometimes the fees go down when the most active traders (usually those in the United States or East Asia) are sleeping!

Path # 2: Dive Deeper into the Rabbit Hole

Once you’ve set aside Bitcoin, you can explore the altcoin market as well. For example, it should be borne in mind that Ethereum (CRYPTO: ETH), and not Bitcoin, is the network of choice for a growing number of NFT and DeFi projects. So if you think these sectors are going to grow, consider expanding your portfolio. ETH actually outperformed BTC in 2021.

Respected analysts like Pantera and deVere predict this trend will continue. They point out that Ethereum is the network of choice for smart contracts, which could find widespread use in the world of conventional finance. Experts add that recent and upcoming upgrades to Ethereum’s network could help improve its performance and reduce its carbon footprint.

ETH isn’t the only altcoin that could be on the rise. Although Ripple executives are currently waging a protracted legal battle with US regulators over whether or not the XRP token (CRYPTO: XRP) is security, Ripple and XRP are finding a warm welcome in Asia. Its RippleNet platform processes transactions faster than many crypto networks, and Ripple has formed a strong partnership with Japanese financial giant SBI Holdings (OTC: SBHGF). The joint venture of the companies in cross-border payments, SBI Ripple Asia, is gaining momentum across the continent.

You can also check out Cardano (CRYPTO: ADA), which was developed by a former Ethereum developer and has established itself as a direct rival to ETH. Its developers are starting to experiment with solutions that would allow tokens created on the Ethereum network to migrate to the Cardano protocol. It’s cheaper than ETH, and its supporters say that one day it will also be faster and more scalable.

This month, Cardano’s Ada token debuted in Japan on the Bitpoint trading platform. Large exchanges usually have fairly strict listing policies, a fact that investors can use to their advantage: If a token has been listed, it means that a team of professionals have taken a close look at its specifications and decided that it should be listed. was worth adding to their trading. Platform.

Another lesser-known token to consider is Klay, a token created by South Korean tech giant Kakao. The coin has been listed on exchanges in South Korea as well as international exchanges like Binance and OKEx.

Kakao operates KakaoTalk, a smartphone chat application used by 87% of South Korea’s population. And he linked his Klay compatible crypto wallet to the interface of that same chat app. This could one day allow Kakao to easily create an ecosystem where the Klay token is the native currency.

Path 3: Do nothing at all

Yes, you read that right.

Imagine keeping a gold bar at home in a safe. So do you spend your days and nights checking the price of gold? Or do you do the right thing and just forget about it until you really need to? Think of BTC the same way. Have confidence in your investment and let BTC do its job over time.

Don’t let inertia leave you on the sidelines of the crypto market. But don’t let FOMO get into your decision-making process, either. Considering whether you should dig deep or sell your stake at the first sign of market anxiety isn’t a smart investment. And the panic of buying more coins at the top of a bubble is not a sustainable BTC ownership strategy. Choose one of the three approaches above – and follow it with conviction – and you’ll have a better chance of successful crypto investing.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a premium Motley Fool consulting service. Were motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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