2024 is already considered a successful year for Bitcoin, as experts forecast a massive price surge due to spot ETFs and the fourth halving contributing to the cryptocurrency’s value. Bitcoin has already achieved popularity by being stable over the past years and ensuring high yields, which is why its adoption rate has skyrocketed compared to other crypto assets.
However, investors must be wary of their actions because Bitcoin remains volatile despite fortunate events. Although most of them heavily invested in BTC spot ETFs since they offered something new to the market, we can’t be sure of their reliability in the long term. The Bitcoin price USD can be affected by supply and demand, market trends and altcoin seasons, so everyone investing in Bitcoin must create a safety net by diversifying their portfolios and being up-to-date with the latest crypto news.
So, let’s see what’s the hype about for Bitcoin in 2024 and why unconvincing investments shouldn’t fool investors.
Fourth Bitcoin Halving to Affect the Market
The Bitcoin halving event happens every four years and handles the creation of new supply by lowering block rewards. In 2020, the Bitcoin block reward diminished to 6.25 BTC, while in 2024, it will reach 3.125 BTC. The rate will affect Bitcoin miners because the rewards they receive cover their mining expenses and hardware requirements that keep Bitcoin safe and reliable.
Bitcoin investors will also face difficulties because as the supply increases and demand stagnates, the prices will boom right after the occurrence, affecting their portfolios. During these moments, some investors might be influenced by FOMO and buy or sell Bitcoin due to anxiety, disturbing the transaction levels.
Spot BTC ETFs to Trigger a Market Rally
Spot BTC ETFs were one of the most exciting assets in the last year because they closely follow the asset’s price without the need to acquire it. Investors were getting spot ETFs to benefit from lowered transactional fees, trading costs, and security prices. Enhanced regulation and accessible price movement made Bitcoin skyrocket during the last quarter of 2023, and some experts believe the trend will continue in 2024 as well.
However, investors should be more careful with their involvement with spot BTC ETFs because they’re still prone to market volatility and might pose significant risks regarding security and tracking errors. Moreover, the lack of regulations might lead to fraud and manipulation since there are no ways for investors to be protected.
What’s the Best Investing Strategy to Adopt This Year?
Investors must learn the ways of the market, meaning analyzing past volatility spikes and trends. Still, when it comes to investing, the best strategy is to hold the assets long-term and make sure they’re not prone to FOMO.
Professionals have heavily promoted the HODL method (hold on for dear life) as a low-risk method of acquiring Bitcoin value. It involves acquiring and keeping the Bitcoins for long periods, such as months or years, for the value to pile up and the portfolio to become stable.
Holding should be done at any time, regardless of market movements.
Finding a robust and reliable cryptocurrency to hold is necessary to withstand challenges, so holding cannot be done with any kind of project. New cryptocurrencies are unstable and might be gone in a few days if there’s no significant interest in them, so choosing Bitcoin and Ethereum as main holding vessels is best.
Another notable investing strategy is DCA (dollar-cost averaging), in which you can better manage risks by investing small amounts of crypto over specific intervals. In time, the method helps lower the average cost per share. Besides these benefits, DCA helps build sustainable investing habits and keeps you up-to-date with the latest opportunities.
Diversify Your Portfolio
Another critical strategy to leverage is portfolio diversification, in which you settle for Bitcoin and Ethereum as the strong base and add plenty of other projects to prepare the portfolio for volatility. Owning large-cap and small-cap cryptocurrencies is necessary to lower risks and yield results.
You should also become interested in different types of tokens, from stablecoins to governance tokens, because each brings something new to the table. These tokens come from distinct industries, such as gaming and finance, each with unique features and benefits. You also have opportunities for blockchain protocols, DeFi projects and scaling solutions to be part of your portfolio.
One of the latest and most demanded crypto assets includes derivatives, but they should be approached carefully, so beginners should wait to look into them. Derivatives include futures contracts, options and perpetual swaps, and they provide agreements for transactions for a particular date or an obligation for selling your cryptocurrencies at a given time. Derivatives also offer an additional gate to DeFi, one of the most prosperous crypto ecosystems.
What Other Cryptocurrencies Besides Bitcoin Are Safe?
Before diving into some of the best cryptocurrencies on the market, it’s safe to say that all are volatile, and the entire market can sometimes be challenging to handle, so take all safety precautions before choosing a particular cryptocurrency to invest in.
However, some cryptocurrencies are worth the try, as their market capitalization, volume, and liquidity are high. Some of these are:
- Cardano is uniquely operated based on reviewed academic research and focuses on global mass adoption by offering environmentally friendly assets and fast transactions;
- Polkadot has been built to offer developers superior software for building blockchains and ensures improved scalability and security;
- Solana is considered a great Ethereum alternative due to its high efficiency in fast transactions and low fees;
- Polygon is a promising crypto project that can provide innovative solutions for attractive investments;
Bottom Line
2024 is supposed to be one of the best years for crypto, as the Bitcoin halving will boost prices and the spot BTC ETFs will drive a market upsurge. Still, despite all the favorable conditions, nothing’s too good to be true. So, investors must prepare their portfolios to withstand any sudden market change due to volatility by diversifying them and turning to promising projects to secure their assets.
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