Bitcoin has had a remarkable run over the past few months. Thanks to its rapid ascent in value, many investors have gotten on board the virtual currency bandwagon. This surge in interest has not been without its downsides for the average investor, though. As more people invest in the market, prices rise and volatility increases as well. It’s no longer just a niche market; many individual investors now want to get their hands on some digital cash. However, this influx has made it much more difficult for new investors to enter the market with a small amount of capital. Luckily, there are ways you can manage Bitcoin volatility in your portfolio.
Invest the Difference
The best way to manage Bitcoin volatility when trading on Bitcoin Smarter and other platforms is to make a small investment in the market. Investing a small amount can help you to get started with trading Bitcoin safely and conservatively. Stay away from the more risky, high-risk investments that Bitcoin investing is known for. Instead, opt for a more conservative approach. This will help to reduce your Bitcoin volatility by not putting all your money in one place.
While this method will not increase your investment returns, it will help to reduce your Bitcoin volatility. You won’t put all of your eggs into one basket and will have some resources to hedge against any price drops. This can also be a great way to get your investment started with a smaller amount of funds that are still easy to manage.
Don’t Put All Your Money in One Place
If you’re just getting started with Bitcoin investing, it might be tempting to put all of your funds into one investment account. However, this could result in very high Bitcoin volatility. If the price of Bitcoin suddenly drops significantly, you could lose a lot of money very quickly. Instead, keep a small portion of your funds in a Bitcoin-friendly investment account. This will allow you to invest in the market, but also keep some funds in a safe place.
If Bitcoin prices suddenly drop significantly, you can quickly hedge against the price drops by selling some Bitcoin in the market. While you won’t be making as much money as you would if you put all of your funds into one investment account, you will significantly reduce your Bitcoin volatility. If the price of Bitcoin suddenly drops significantly, you will have a portion of your funds that you can quickly move into a new investment account.
Use a Bitcoin Trading Strategy
Bitcoin investment strategies can help to manage Bitcoin volatility in your portfolio. This can help to reduce the risk in your portfolio and increase your Bitcoin investment returns. Some of the most popular strategies include trading the volatility futures market and investing in a cryptocurrency hedge fund. Both of these strategies have the potential to reduce Bitcoin volatility significantly. However, both have trade-offs that may make them less attractive options for certain investors.
Investing in the volatile futures market could help to manage Bitcoin volatility in your portfolio. This is a market where investors can invest in a variety of financial assets, including Bitcoin. However, this investment strategy has the potential to increase your investment returns significantly. This can lead many investors to prefer this option.
Investing in a cryptocurrency hedge fund could help to reduce your Bitcoin volatility. This is because you are investing in a fund that has a wide variety of Cryptocurrencies as its portfolio. This could help to reduce your overall Bitcoin investment portfolio volatility and increase your returns.
You Should Check – Top 5 Best Bitcoin Trading Platforms
HODLing
Another way to manage Bitcoin volatility in your portfolio is to HOLD. This stands for “HOLDing (or ‘Hodling’) your Bitcoins”. The idea of this strategy is that you should just leave your Bitcoins in your savings or investment account. This can reduce the risk of losing all of your funds if the price of Bitcoin drops significantly. However, it does mean that you are waiting for the value of Bitcoin to increase.
HODLing will help to lower your Bitcoin volatility as you aren’t putting all of your eggs in one basket. You will have some funds in a more stable, safer investment account. If the price of Bitcoin does increase in value, it can give a nice bonus to your savings account. This can help to reduce the overall Bitcoin volatility in your portfolio. By holding Bitcoin in your investment account until such times, you can benefit from the price increase.
Final Thoughts
Bitcoin has become a popular investment for many investors, and prices have risen significantly. However, this has also hurt Bitcoin volatility. Luckily, there are several ways that you can manage Bitcoin volatility in your portfolio. Invest the difference and don’t put all your money in one place. Additionally, you can use a Bitcoin trading strategy and HOLDing. These are just a few ways that you can reduce Bitcoin volatility in your portfolio.
