CAPE TOWN – If you’ve bought Bitcoin and have seen lows of around R49 000 and highs of R176 000 in 2019, you might be wondering what to do next. Should you sell? Should you buy?
Every day, South Africans buy cryptocurrency for the first time. It is a quick and simple process on leading cryptocurrency exchange, Luno where you can buy a fraction of Bitcoin from as little as R10. Marius Reitz, Luno’s GM for Africa, shares some insights into what you should consider when joining this new financial system.
Decide whether to sell, buy or hold
It’s very difficult to tell someone whether to buy, sell or hang on to a cryptocurrency. People invest for different reasons. Are you buying and holding because you believe Bitcoin is going to be part of a new financial system? Or are you buying and selling (like trading shares) to make a quick profit? Do you want to buy more now because the price is lower than it was a month ago?
Whatever your reason, Bitcoin’s price progression over time has steadily increased and is characterised by booms (when the price goes up a lot) and busts (where the price falls a lot). Over time, the price has increased but, ultimately, it’s your choice whether and when to buy, sell or hold.
One of the ways around Bitcoin price swings is to commit to investing a set amount of money each month on a certain day, just like a debit order. By doing so, you will benefit from Bitcoin price averaging and reduce the effects of market movements. This means that some months, you’ll pay more and some months you’ll pay less, but over time it will average out and you won’t be worrying as much about the perfect time to buy or sell.