How to Invest Money in Bitcoin 2023

Crypto investing strategies to stay rich

The big secret to invest money in bitcoin profitably is having a sound strategy. Only amateurs try to time the market. Real investors have a long-term strategy.

Making money from bitcoin is not based on how much you know about the financial markets. And yes, you can make a lot of money if you invest in bitcoin wisely. But you can also lose money too.

In 2021, I published a book on how to invest in bitcoin and crypto after watching a lot of people lose money in the 2021 crypto crash. I had already learned my lesson in the 2018 crash. And never repeated my mistake.

In 2023, nothing has really changed. As of writing, there is a high tendency that bitcoin is about to gradually enter into another bullish phase. But do note that investing without a strategy can make you lose money even in a bull phase.

This is not an article to show you which crypto exchange to use or how to read bitcoin charts. This is an article that explains a strategy to invest in bitcoin based on the economic cycle to give you an understanding of how to make money every time.

Notice it is not “when to buy” but “how to buy”. And notice it is not “when to sell” but “how to sell”. This is not about timing the market. These are some of the things the rich 1% in crypto knows.

Every time I have tried to time the market with bitcoin, I have lost money. Every single time.

Introduction to the Strategy

The strategy I am about to explain to you is from the first chapter of my book, Crypto Investing Strategies For Non-Greedy People. Even though it has been more than 2 years since I published the book, the principles still work to date.

The only condition here is that you must not be greedy.

Bitcoin is here to stay. Love it or hate it, you can’t stop it. Bitcoin doesn’t care about your opinions. It is what it is.

By the way, I am not an “investment adviser” or “expert” in any way. I am just someone who has worked out a couple of things and noticed what works. This strategy is just my brain work. You bear full responsibility for using it. I offer no promises.

The Three Assumptions

This strategy is based on three assumptions. Here they are:

  1. Bitcoin is here to stay, and it will not go to zero. I know a couple of people who will buy all the bitcoins in existence if the price goes below $1. And if I were to get that chance, I would do the same. This is why I consider it a safe assumption that bitcoin will always have value.

  2. The price of bitcoin falls and rises without much rationale. The price has wild swings. And it will continue to have wild swings.

  3. Bitcoin is always readily available on the market. If you have money to buy, there is someone willing to sell.

What is Bitcoin?

Next, it is important to understand what bitcoin is. This is so you can understand how to classify it in your investment portfolio. From what I have learned thus far about it, here are my deductions:

  1. Bitcoin is not an asset. This is simply because owning it does not give you residual income.

  2. Bitcoin is not a commodity. You can’t use it to do anything. You can make jewelry from gold, you can get fuel from oil... you can’t do anything like that with bitcoin.

  3. Bitcoin has intrinsic value because miners incur energy costs to keep the network up and running.

  4. Bitcoin can be used as a currency, but it is not like the currencies we are used to. The value is not backed by any government, hence it is unstable and at the mercy of the market forces of demand and supply. (El Salvador has accepted bitcoin as legal tender, but they are not backing it. No country can back bitcoin.)

There are three major ways to invest in bitcoin: mining, trading, and developing. The only reasonable way for regular people to invest in bitcoin today is by trading. However, trading profitably requires you to be emotionally aloof and disinterested. And many aren’t capable of that.

The Two Investing Concepts

The philosophy of this investing strategy is based on two concepts:

 Dollar-cost averaging

 Re-balancing

Dollar-cost averaging is when you invest the same amount every week or month regardless of what the price is. Sometimes the price will be low and sometimes it will be high, but over a long time the prices will offset each other.

Rebalancing is a technique where you take your profits when the times are very good and spread the gains on other things.

So, the strategy is to use dollar-cost averaging to buy. And use the rebalancing technique to sell.

The Core Strategy

Before breaking down the method, this is just to let you know that this strategy is not for someone who wants to get rich quickly. In fact, it is not really investing. It is just a glorified way of saving money. All regular currencies of the world are constantly devaluing so they can stay competitive. So if you are saving them, you’re getting thrown under the bus.

Consider investing in crypto as a way to save up your money and use it to buy assets. It is much better than saving in a bank.

It is important to know when to cash out of crypto, and then what to do with that cash.

The Step-By-Step Method

● Download a crypto trading app that also has a crypto wallet service. It must be a platform that allows you to move money from your local currency into bitcoin seamlessly.

● Watch the fees. They are important. The platform you choose can have deposit and withdrawal fees. But make sure that they have small or no trading fees.

● You only need a platform that exchanges your local currency to bitcoin and vice versa. You don’t need other cryptocurrencies (unless you are a pro). In short, don’t bother your head about anything else your platform offers.

● Register on your platform and make sure you are eligible to use it. Most require some identification for proper verification. Do all that is necessary. The user interface must be comfortable and not confusing.

● Dedicate a certain amount of money from your income as the amount you will save. The percentage depends on your income size. But it must be something that doesn’t harm you in the short term. Something between 1% and 10% is reasonable. And if your income is really large, you might even do less than 1%.

● Every week or month (or however you are paid), buy an amount of bitcoin with this money, regardless of what the price of bitcoin is. You don’t need to care where the price is or where it is going. Just buy that small amount.

● Stick with this gradual buying no matter what happens. In fact, don’t check prices or listen to analysis. Just do this simple thing regularly

● Then set a price alert. Set a price alert for when the price of bitcoin hits a figure that will really get you excited. It could be at 50% more than when you began, or when the price doubles. But just set a high price alert.

● When bitcoin reaches and exceeds the high price alert you set for it and, of course, your money has grown quite well, then you rebalance. This means you sell half of your entire holdings

● Then you set another high price target. If it gets there or exceeds that point, you sell half again.

● You can use the half you sell to buy an asset: maybe stocks, bonds, real estate, etc. Or you could decide to enjoy yourself with the money.

● It is very important for you to sell half of your holdings when you get that surge in price. You may be tempted to hold on a little longer to see whether the price will go further up. But if you rely on such, you will be let down.

● When you sell, don’t forget to keep buying according to your schedule. No matter how high or low the price, stick to your schedule.

Always remember that when everybody starts celebrating bitcoin in the media, it is a sign for you to rebalance. And you must be disciplined to keep buying according to your schedule, especially when they start saying bitcoin is dead (again).

This pattern has repeated itself a couple of times already. And it will happen again. Never trust your emotions. Decide what your actions will be before that time comes.

Conclusion

This strategy is not for portfolio managers. It is for regular people with steady incomes. It is for people who have jobs that keep them busy. It is not for full-time traders or price speculators.

It is not wise to save money in the bank. If you have to save, be smart enough to save (at least, some) money in bitcoin. And be disciplined enough to sell half at the right time.

If you want to learn more about this investing strategy for bitcoin and the strategy for other cryptocurrencies, get my crypto investing book.

Stay rich.

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