When Is The Right Time To Invest and Sell Cryptocurrency?

August 5, 2021

When Is The Right Time To Invest And Sell Bitcoin?

Investing in an entity when its price is low and expected to surge is a smart investing strategy

Bitcoin is the buzzword in the world of cryptocurrency. With so much attention devoted to it, Bitcoin never fails to amaze or shock investors. It recorded an all-time high of $65,000 (approx. Rs 48 lakh) in mid-April only to crash below $30,000 (Rs 22 lakh) in May. It had recovered to surpass the $42,000 (Rs 31 lakh) mark but was trading at $38,000 (Rs 28 lakh) on Wednesday evening. While those already invested in the world's most popular and oldest currency see this volatility as risky, potential investors see it as an opportunity to make quick gains.

In such a situation, how does one decide when to invest in cryptocurrency? Industry experts have said that the current volatility in Bitcoin price is only short-lived and another bull run maybe around the corner. Whatever be the truth, there's no shortcut to making money. All speculative investments demand patience and the ability to read market trends correctly.

One way of understanding Bitcoin's ability to give returns is by seeing its performance last year. Bitcoin's value in March 2020 was around $4,000 and by January this year, it reached over $33,000, giving a return of over 800 per cent in just eight months.

When To Invest?

Investing in an entity when its price is low and expected to surge in the future is considered a smart investing strategy. Comparing Bitcoin's value since April, it would not be wrong to say it's a dip in its price. Again, it's difficult to say with surety when Bitcoin will surge or whether it will crash further. If you are thinking of investing in Bitcoins, there really is no perfect time. However, if your strategy is long-term gains, buying during a dip and holding it till you make a profit is an option you can explore.

You can also split your investment into phases. This will help you get a better grip on where the value is heading, over a contiguous period of time.

When To Sell?

The adage “Buy low, sell high" is one of the most popular market truths to be practiced. While the strategy sounds catchy, it is not easy to predict the “high”. However, if you have better investment alternatives that are less volatile, selling Bitcoins can be a viable option.