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It's also important to remember that Bitcoin is still a relatively new and volatile asset class. As such, it's crucial for investors to diversify their portfolios and not put all their eggs in one basket. This way, even if Bitcoin doesn't perform as expected, they have other investments to fall back on.
That is not true. There is no need to diversify for the mere sake of diversification.. especially for newbies.
Newbies in Bitcoin should actually put their thoughts, not on the technicalities of Bitcoin, but mostly on their financial strengths, and reliability of the investment as every other investor should.
You seem to be contradicting yourself a bit. Sure, newbies may well need to figure out their own finances and their psychology.. but you seem to be focusing also on some kind of need to understand the underlying investment (which is bitcoin in this case).
New Bitcoin investors shouldn't worry too much about the technical intricacies of Bitcoin or trying to predict market movements in the short term. In the initial stages, it's much more important to focus on understanding the fundamentals of Bitcoin, such as its decentralized nature, limited supply, and potential use cases.
Maybe I kind of agree with you here.., even though you are saying it in a bit of a weird way.
I think the main point is get started and learn along the way.. and also if there is discomfort with the amount of bitcoin knowledge, or even discomfort with the person's (newbie's) financial / psychological status, then adjust the investment amount into bitcoin downwardly while learning about bitcoin and to be able to feel that s/he is not overly investing in such a way that it is going to contribute towards either financial and/or psychological stress.
While it's certainly beneficial to stay up-to-date on Bitcoin news and developments, trying to time the market or predict short-term price fluctuations can lead to unnecessary stress and potential mistakes.
That's in my opinion that is. Well, there are other things a 'new coiner' should focus on though.
I think lowcoiners should focus more on holding and stuff like that, instead of market predictions and chasing the wind.
Surely I agree with you in regards to the earliest of bitcoin accumulation stages which may be 4-10 years or longer depending on how aggressi vely that a newbie is able to invest into bitcoin, so yeah, maybe after several years investing into bitcoin, s/he might be able to start to consider market timing kinds of matters.. but yeah, in the very earliest of BTC accumulation stages there may well be hardly any need to really think too much about timing of the market...
Let's say for example that a newbie gets started in bitcoin and decides to invest 10% of his/her salary into bitcoin and with that rate of investment, it is going to take right around 10 years to have 1 year's worth of salary invested into bitcoin, and so we cannot necessarily presume that bitcoin values are going to out pace the rate of inflation, so after 10 years we may well ONLY have an investment that is right around 1 year's worth of salary (expenses)... I have a hard time considering that someone that ONLY has around 1 year's salary invested into bitcoin would really be in a strong financial situation to start to time the market, even though surely folks are able to engage in their own analysis including it makes way more sense to analyze where someone is actually at after 4-10 years or longer rather than speculating about it, so in that regard, the analysis makes more sense when it is based on the data that accounts for where the person is actually at rather than where the person may or may not be.. and of course, we can also choose our level of aggressiveness in order to attempt to try to get to a stronger financial and/or psychological situation faster,
and so for example a person who invests 25% of his salary into bitcoin is going to reach 1 years of salary in right around 4 years, so the time is drastically reduced when a person develops the capacity to invest higher percentages of his/her salary (by either increasing income or reducing expenses), and yeah, not all people are able to invest anywhere close to 25% of their salary, and there are so many folks who struggle (and/or are not ready, willing or able) to even invest somewhere in the ballpark of 10% of their salary into something like bitcoin.. so surely some folks might speculate that investing is easy, but it takes a quite a bit of efforts to both establish a system and then to employ such system while at the same time not being tempted to be dipping into one's investment prior to allowing their investment with the passage of time to continue to grow... poor people can really be tempted to dip into their investment portfolio and to borrow from it or to take profits or some other short-sighted nonsense that they might not realize and/or appreciate the negative consequences of their inabilities to refrain from dipping into their investment portfolio (whether bitcoin or anything else.. here we are talking about bitcoin, of course).
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You are already late to bitcoin so why do you still want to delay the opportunity that you have to start and grow your portfolio overtime. Bitcoin knowledge is complex and cannot be learnt in one year, and since you are on a long term journey, you only need to know the basic which is how to buy and which wallet to use that is safe to store your bitcoin, and how to transfer your bitcoin to your self custody wallet, cold storage is the best. Whatever area of bitcoin that you are interested in, you can learn it with ease and not in a rush because your are accumulating continuously.
Probably the most basic thing to learn in the beginning is whether you have discretionary income or not.. and if you determine that you do, then you can figure out how much to buy, and so you have to figure out from where to buy it.
Now if you are starting out by buying $10 to $200, then maybe there is no need to learn how to self-custody.. so self-custody and wallet use may well be learned later down the road... maybe even after already buying bitcoin for several months, maybe even a year.. depending on how much you might be buying and/or if it might become justifiable to hold your coins in self-custody.
Don't get me wrong, I consider self-custody to be a very self-empowering part of bitcoin, but self-custody and/or learning about self-custody surely are not prerequisites to getting started in bitcoin.
A new investor that has a good financial management and always save money in the bank or anywhere for a long time whenever he gets paid, will easily invest in bitcoin using DCA strategy by putting that amount of money that he is always saving into buying bitcoin regularly weekly or monthly consistently and persistently. For those new beginners who are not used to saving some part of their income, what they need is to make a proper calculation on how much of their discretionary income that they will use to buy bitcoin that will make them be able to invest regularly and increase their bitcoin portfolio overtime.
Surely, these are the basic ideas that any investor needs to know or learn in the beginning of investing, and surely some new investors might not already have good cash management practices or even clear ways of understanding the extent to which they have discretionary income and how to manage their discretionary income in such a way that they are able to invest with some of their discretionary income.
It's also important to remember that Bitcoin is still a relatively new and volatile asset class. As such, it's crucial for investors to diversify their portfolios and not put all their eggs in one basket.
It is not important to diversify your bitcoin portfolio into other assest that is not in the same line with bitcoin. It is a matter of choice by that investor. You should also note that a new beginner in his bitcoin journey or a low coiner should not think of diversifying and should only focus on one investment which is building his bitcoin portfolio to a certain level before he diversify if he chooses to do so. If in the early age of your bitcoin journey, you start diversifying, you will lose focus on which investment to focus on and that will lead to a poor outcome in the long run due to lack of proper planning before diversifying.
Yep.. bitcoin and cash are the two main categories in order to start investing, and surely if any beginner starts to get into other investments, then there may well both be a loss of focus and a dilution of funds... so surely as you stated Frankolala, there is no need to consider diversification as any kind of necessary prerequisite, and considering diversification surely can both be distracting and counter-productive for the newest of investors.