 what is going on guys welcome back to bitcoin daily for another video today we are answering a question that we get all the time the question is how much money should i invest in crypto we are answering that question for you guys today we're going over all aspects of it everything you need to take into consideration everything that you should be asking yourself before making your first investment so hope you guys enjoy this make sure to subscribe hit that notification bell make sure to hit that like and make sure to drop a comment so the question is how much should i invest in bitcoin if you have a pile of cash which you want to invest into the financial markets how much should you invest should you diversify into other cryptocurrencies as well are the opportunities in the cryptocurrency market so juicy that you should just go all in or maybe just a humble one percent or perhaps somewhere in between those two extremes without a doubt cryptocurrency investment is extremely high risk even if you put your money into bitcoin the most reputable cryptocurrency around you're still investing in experimental technology sure you're probably wondering how about icos and all these new projects well in the increasingly hyper competitive crypto space expecting that nine and ten projects will fail is probably on the low end sure that single project that does explode in value couldn't make up for the other nine failures however this assumes that you'd have enough time and luck to find that needle in a haystack for most people including me that's a completely unrealistic assumption so what's the perfect amount to invest in bitcoin or other cryptocurrencies well let me just cut to the chase there is no one answer to this question which will be appropriate for everyone the recommended number by many financial experts who are in the bitcoin space recommend between 1 to 2 percent of your total investment portfolio in crypto however the younger you are the higher the risk you can take some millennials have over 10 percent of their portfolio invested in crypto i myself average between 25 to 50 percent of my investment portfolio in crypto but it is an amount that i am willing to lose which are mostly profits and not out of pocket money so what should i do well unfortunately i can't make that decision for you especially since i'm not a financial advisor but from the research that i've done there is a strong argument for some exposure in the cryptocurrency market but going all in that seems quite extreme the only caveat to that might be if your total investment capital is low for example under $2,500 and you're young like a millennial or a generation z and that's only because in the grand scheme of your lifetime earning potential losing that much wouldn't hurt you too much in the long run if you lost it all so questions to ask yourself when you're trying to figure out how much money you want to invest in crypto the first thing is do you have a lot of debt because if you have a lot of debt then you probably want to take care of that first before you go on investing money the second question you should be asking yourself is do you have an emergency fund of at least three to six months emergencies can happen at any time you always want to have an emergency fund for that can cover your expenses for at least three to six months so if you don't have that emergency fund set up yet that can cover your expenses for at least three to six months i don't recommend investing into crypto yet you need to get your affairs in order before you start risking money especially in something that's so high risk and volatile the next question you should ask yourself is will you need this money for anything at all in the next 12 months if you need this money for tuition or bills cell phone credit card vacation whatever it is then you should probably not invest this into crypto statistics show that 99 percent of crypto investors are profitable over the long run so that's why you need to prepare to have your funds in the market for at least 12 months the next question to ask yourself is will you be okay if you lost your total investment i know scary right but that's definitely something that we have to ask ourselves before making an investment you have to think about this because it is a real possibility to lose your investment and you have to be okay with it so the amount that you're investing has to be an amount that if you lost it all it would not in any way shape or form affect your daily life and your day to day life the next question you should ask yourself is will you lose sleep over the ups and down of this volatile market we have to face it this market jumps up and down very quickly and the proof is in the history if you look back to 2017 when bitcoin hit 20 thousand dollars which is the all-time high and then you look back a year after in 2018 where bitcoin dropped all the way to three thousand dollars you have to ask yourself would you have been able to hold on throughout that whole period would you have been able to know when to get out these are questions that you need to ask yourself and you need to answer if you will lose sleep over a 20 drop of your portfolio's value of your investment's value then you should probably consider investing in something a little bit safer maybe in the stock market or some bonds or something else because bitcoin definitely jumps up at the same way it could jump up 20 percent in a day it could also drop 20 percent in that same day so are you mentally prepared for this ride if your answer to any of these questions is even a maybe then you should reconsider before investing into the cryptocurrency market so the next thing that we should talk about is how to finally buy that first crypto right so what i always suggest anyone that asked me for my opinion on how to do it is dollar cost averaging so the way that you should divide your investment budget is into weekly or monthly purchases this is going to average out your entry price giving you the best entry possible because we don't know at the end of the day we don't know what the big what bitcoin's price is going to do whether it's going to rise or drop we don't know so the best way to get the best entry possible is to dollar cost average your entry so for example if you buy at ten thousand dollars and it drops to five thousand dollars and then it goes back up to seventy five hundred dollars then you're down twenty five hundred dollars right but if you buy at ten thousand dollars and it drops to five thousand dollars and you buy again the same amount and then it goes back up to seventy five hundred dollars now you're no longer down twenty five hundred dollars now you're down now you're i'm sorry Now you're break even because you bought a Bitcoin at 10,000 you bought a Bitcoin at 5,000 So your average entry is 7,500 so once it gets back up to 7,500 now You're break even and once it gets back to 10,000 now you're up 2,500 Does that make sense? Next we need to speak on diversification So it's a technique used to reduce the importance of luck It means that you will not only invest in Bitcoin, but also allocate your capital to different investments For me personally, I keep around 30% to 50% in Bitcoin and Ethereum Bitcoin being my biggest holding Then I spread a small slice approximately around 20% across the other cryptocurrency projects that I'm interested in mostly in top 10 cryptos I don't I One one, I don't really go out into new projects much because I trade based on technical analysis and When there's a new coin or new project unless I really really believe in it it has to go through a discovery period where it where it discovers what its true price is so I don't want to be in Invested in it while it's trying to discover what its actual value is. That's why I don't invest in new projects Okay, now Other than that, right I do put I do allocate around 1% to 5% on what I call lottery tickets, which is you know um Dart throws or home runs or you know something like that where I just I might really believe in in this one project and You know, I'll put one. I'll risk 1 to 5% of my total crypto portfolio on that After that I use about 20 to 25% of My crypto portfolio to day trade Okay, I do day trade I do scalp So I use about 20 to 25% of my portfolio to turn Basically get Bitcoin and turn it into more Bitcoin right and Then Finally I keep around 10% of My portfolio in cash So that I'm always ready to buy the dips Um So that's how I break down my portfolio You know, you have to figure out how to break down your own portfolio all in all don't put all your eggs into one basket It would be like playing Russian roulette you'll win and win and win But when you lose you lose everything So the bottom line It's important to understand how Bitcoin works before investing any money Bitcoin is still new and it can take months to understand the true impact Bitcoin can have on the world Take some time to understand Bitcoin how it works and how to secure more and about how Bitcoin differs from fiat This information should not be taken as investment advice It is for general knowledge purposes only you should do your own research before buying Bitcoin What's up, welcome back guys. I hope you enjoyed the video Let's do the question of the day real quick. So the question of the day is Let me think oh, yeah, I got it What is the recommended way of buying Bitcoin so that you have the best entry? That is a question of the day guys and make sure to drop it in the comments Make sure to hit that like make sure to subscribe to the channel and share it with your friends and family Guys, I hope you enjoyed this video peace and love