Tips for Prudent Management of Bitcoin
Pierre Rochard, VP of Research at Riot Platforms (NASDAQ: RIOT), recently shared valuable advice for Bitcoin users on social media platform X (formerly known as Twitter). His tips are aimed at ensuring prudent management and understanding of Bitcoin.
What to Avoid in Bitcoin Management
Rochard’s advice for what you should avoid doing with your Bitcoin.
- Borrowing Against Your BTC: Borrowing against Bitcoin can be risky due to Bitcoin’s price volatility. If the value of Bitcoin drops significantly, borrowers might face margin calls, requiring additional collateral or risk liquidation.
- Don’t Lend Your BTC: Lending Bitcoin involves credit risk. If the borrower defaults or the lending platform faces issues, lenders may lose their Bitcoin.
- Don’t Daytrade Your BTC: Day trading Bitcoin is highly speculative and risky, especially given the cryptocurrency’s volatility. It requires constant market monitoring and can lead to significant losses.
What to Do in Bitcoin Management
Rochard’s advice for what you should do with your Bitcoin
- Gradually Accumulate BTC: Gradual accumulation, often through dollar-cost averaging, reduces the impact of volatility.
- Self-Custody Your BTC: Self-custody means storing your Bitcoin in a wallet where you control the private keys.
- Study How Bitcoin Works: Understanding the technology and economics behind Bitcoin is crucial for informed decision-making.
Eric Wall’s Recommendation
At the end of his post, Rochard asked if anyone had other valuable Bitcoin tips. This is what another Bitcoin OG, Eric Wall, offered in reply:
“Don’t believe that a mathematical formula you read about on the Internet can tell you what the price of Bitcoin is going to be.“
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