Fixed investment in Bitcoin: a new investment outlet or full of risks?

In the wave of the digital currency market, Bitcoin is undoubtedly the most eye-catching star. As more and more investors join this field, the strategy of fixed investment in Bitcoin has gradually attracted attention. Fixed investment, that is, regular fixed investment, is an investment method aimed at diversifying risks and smoothing purchase costs. However, is fixed investment in Bitcoin reliable? What are the risks behind it? This article will explore the feasibility and potential risks of fixed investment in Bitcoin in depth, hoping to provide some practical insights for investors.

First of all, it is very important to understand the investment characteristics of Bitcoin. Since its birth in 2009, the price of Bitcoin has experienced several rounds of huge fluctuations. From the initial few cents to tens of thousands of dollars today, the price increase of Bitcoin is remarkable. However, along with the sharp price fluctuations, there is also great uncertainty in the market. Multiple factors such as Bitcoin's supply and demand relationship, market sentiment, policies and regulations will affect its price. Therefore, investing in Bitcoin, especially fixed investment, must be fully aware of these risks.

One of the main advantages of fixed investment in Bitcoin is that it can effectively spread the cost. According to the principles of market economics, regular fixed investment can reduce the entry cost of investors to a certain extent. To give a simple example, if an investor invests 1,000 yuan in Bitcoin every month, assuming that the price of Bitcoin fluctuates in different time periods, the number of Bitcoins purchased when the price is high will be less, and the number of Bitcoins purchased when the price is low will be more. In this way, over a long period of time, the average cost of investors will tend to stabilize, thereby reducing the risk of a single investment.

However, investing in Bitcoin is not a foolproof path. In the Bitcoin market, price fluctuations are the norm. Taking 2021 as an example, Bitcoin broke through $60,000 in April, but in the following months, its price fell sharply, even falling below $30,000 at one point. For investors who invest in Bitcoin, if they continue to invest at high prices, they may suffer large losses. In addition, the market liquidity of Bitcoin is relatively poor, and in extreme cases, investors may face the risk of not being able to sell in time.

Another risk that needs to be paid attention to is policy risk. The regulatory policies of governments on digital currencies vary greatly, and some countries even completely ban the trading and holding of Bitcoin. For example, the Chinese government once again stepped up its crackdown on Bitcoin mining and trading in 2021, causing market panic and a sharp drop in prices. Such policy changes often have a direct impact on investor confidence, which in turn affects the price of Bitcoin. Therefore, before making a fixed investment, investors need to pay close attention to relevant policy dynamics so as to adjust their investment strategies in a timely manner.

In addition to market fluctuations and policy risks, technical risks are also factors that need to be considered for fixed investment in Bitcoin. As a digital currency based on blockchain technology, the security and stability of Bitcoin are based on technology. However, the continuous evolution of technology and the frequent occurrence of hacker attacks have challenged the security of Bitcoin. In 2014, the famous Bitcoin exchange Mt. Gox went bankrupt due to hacker attacks, hundreds of thousands of Bitcoins were stolen, and hundreds of millions of dollars in losses were caused. This incident has caused many investors to question the security of Bitcoin, and also reminded us that we must choose a safe and reliable trading platform when making fixed investments.

From a psychological perspective, fixed investment in Bitcoin may also face emotional risks. When faced with market fluctuations, investors are often affected by emotions and make irrational decisions. For example, when the price of Bitcoin falls sharply, many investors may choose to stop loss and sell, resulting in losses. When the price rises, they may increase their investment due to greed, but end up being trapped at a high level. Therefore, establishing a good investment mentality and maintaining rational judgment are the keys to the success of fixed investment in Bitcoin.

Although there are many risks in fixed investment in Bitcoin, there are also successful cases. Many investors who have persisted in fixed investment for a long time have obtained considerable returns after the market rebounded. Take an investor as an example. He has invested 1,000 yuan in Bitcoin every month since 2018. He has experienced many fluctuations in the market and finally received several times the return in 2021. This shows that fixed investment in Bitcoin is still an investment strategy worth trying in the case of long-term holding.

When making fixed investment in Bitcoin, investors can adopt some strategies to reduce risks. First, formulate a reasonable investment plan, clarify the cycle and amount of fixed investment, and avoid blindly following the trend. Secondly, diversify investments. In addition to Bitcoin, you can also consider other digital currencies or traditional assets to reduce the overall investment risk. In addition, regularly evaluate the investment portfolio, adjust the strategy in time, and respond flexibly according to market changes.

For those who are new to Bitcoin investment, it is crucial to learn and understand the market. You can gain knowledge about Bitcoin and its market by reading books, taking courses, or joining investment communities. At the same time, paying attention to industry dynamics, understanding technological progress and market trends will help make more informed investment decisions.

In this era of rapid development of digital currencies, fixed investment in Bitcoin as an investment method is both attractive and accompanied by risks that cannot be ignored. When choosing to invest in Bitcoin, investors need to be rational, fully assess their own risk tolerance and market changes, and formulate an investment strategy that suits them. Through scientific investment methods and a good mentality, fixed investment in Bitcoin may become a path to wealth freedom.

Finally, it is worth thinking about how to find an investment method that suits you and stay rational and calm in this digital currency market full of opportunities and challenges. This is a question that every investor should think deeply about. There are risks and benefits in fixed investment in Bitcoin. Only by continuous learning and adaptation can you be invincible in this investment game.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

As we all know, the digital currency market is a risky market. If many investors want to survive better in the currency market, they have to master some investment methods to fight against the unstable currency market. When the encrypted digital currency falls sharply, many investors will increase their holdings of Bitcoin, because many people believe that long-term holding of Bitcoin is a safe investment method. Most investors like to use fixed investment to buy Bitcoin for a long time. For some newcomers in the currency circle, they don’t know what fixed investment is. So, is it reliable to invest in Bitcoin? Let the editor of the currency circle bring you an introduction to the risks of fixed investment in Bitcoin.

 Is it reliable to invest in Bitcoin?

The so-called fixed investment is actually to continuously buy a certain number of targets according to a fixed cycle. For example: as soon as the monthly salary is received, take out a part of it, regardless of whether it rises or falls, and buy a certain index fund. This action is carried out for several consecutive years, and then you will find that you have a considerable asset.

This method is very suitable for many people. And in the end, it can also achieve certain results. In fact, our monthly social security can be regarded as a kind of fixed investment. When you are young, you deposit it month by month, and take it out month by month after retirement.

Although this operation is suitable for most people. But not all targets are suitable for fixed investment. For example: Bitcoin.

Many people may not be convinced by what I said. After all, Bitcoin is now in its heyday and very bullish. If you started fixed investment many years ago, the returns today are scary enough. If you have held Bitcoin before and have been holding it until today, I am very convinced. It must be admitted that in the past few years, Bitcoin can be regarded as the investment target with the highest return on investment among many well-known investment tools, without a doubt! Please allow me to call Bitcoin an investment tool here. Most people don’t really care what Bitcoin is, as long as they can speculate and make money.

However, if you copy the successful investment in the past to today, and do fixed investment in Bitcoin, dreaming of financial freedom one day. Then I can only wish you good luck. I don’t think Bitcoin is a good target for fixed investment. First of all, fixed investment is a continuous and long-term action, which is very suitable for collecting cheap chips in a bear market, and then taking advantage of the bull market to achieve a big increase in wealth. Therefore, it is very good to buy fixed investment targets when the price is low. Because it can continuously dilute your costs. But this is not in line with the market of Bitcoin. Bitcoin has been rising for more than a year!

If you have started to invest regularly in the past year, you can indeed make a lot of money, but the overall income cannot outperform its growth. Why? Because in a bull market, regular investment does not dilute your costs, but dilutes your profits! Because the higher the price, you can only buy fewer shares with the same amount of funds, so your overall holding cost will be raised, and the overall profit will be diluted accordingly. This is a very simple math problem, which will not be explained here.

Today's Bitcoin has hit a record high not long ago. No one can say whether it will continue to rise in the future, or it will be guillotined like before. If it continues to rise, except for the dilution of profits, there is actually nothing to do. In short, there is still money to be made. But what if there is a guillotine? What if there is a 50% callback, or even a large callback? This is not an exaggeration. For a trading target like Bitcoin, such a callback only takes less than a week. At this time, all your previous profits will be vomited out, and you may even suffer losses! Assuming you can bear it and continue to invest, are you sure that this product will rise again in the future? Please don't talk about faith or anything like that. In the world of investment, the only faith is to make a profit, and everything else is an excuse. Don't say that you have been holding on to the fixed investment. You can say that now only because it hasn't really happened to you. If a certain asset shrinks by 50% and it really happens to you, it is difficult not to collapse mentally if it does not only account for a small part of your total assets!

 Introduction to the risks of fixed investment in Bitcoin

Even if Bitcoin grows very impressively, it is still a high-risk asset and still has the risk of returning to zero. No one can guarantee that Bitcoin will be 100% successful. Now, let's calculate the expected rate of return of hoarding and not hoarding coins. The input conditions are as follows:

10% probability of Bitcoin success, an increase of 100 times, that is, a rate of return of 10000%. 90% probability of Bitcoin failure, returning to zero, that is, a rate of return of -100%. Therefore,

Expected rate of return of hoarding coins: 10%×10000%-90%×100% = 10000%-90% =
910%Expected rate of return of not hoarding coins: 0%Obviously, we should hoard coins. Although the probability of Bitcoin's success is small, it will be a big deal if it succeeds. What's more, the probability of Bitcoin's success is definitely more than 10%, at least 30%. I wrote it so pessimistically to tell you that even if there is only a 10% chance, Bitcoin is still worth owning.

To sum up, this is the answer of the editor of the currency circle to the question of whether fixed investment in Bitcoin is reliable. I hope that this article about the risks of fixed investment in Bitcoin by the editor of the currency circle can help investors have a more comprehensive and in-depth understanding of this method of fixed investment in Bitcoin. The editor of Coin Circle would like to remind all investors that when investing in Bitcoin, in order to avoid risks, the editor of Coin Circle recommends that the overall investment should not exceed 30% of your own funds, and no more than 50% at most. It is important to achieve financial freedom as soon as possible, but it is also important to ensure that your current life is not affected. Therefore, everyone must protect their own principal, so that the chances of a turnaround are greater.