It’s alright to want a slice of the crypto pie, but it’s not alright to dive into the crypto waters without preparation. Cryptocurrencies may be the hottest trend now but understanding how the crypto market behaves is crucial.
Key things to understand if you are keen to invest in cryptocurrency:
The crypto market isn’t like the stock market; it doesn’t follow traditional financial rules and norms. So, predicting how much a coin will rise in value is based purely on speculation and peoples’ sentiments. This is why you need to keep these important things in mind when investing and trading in cryptocurrencies:
- Research: If you don’t know how the crypto world works, it’s a huge shortcoming as a new investor. The prospect of making riches from rags can be tempting for anyone; but if you don’t know what lies beneath, you can get scammed easily. For instance, you must choose the right platform or exchange for buying your first coins. Look for exchanges with a solid track record and good reputation and those with secure payment gateways. For a free consultation, reach out to GoCrypto NYC.
- Stay informed: Did you know that world events can have an impact on cryptocurrency values? Whether it’s the Russian invasion of Ukraine or the freezing of Canadian bank accounts, everything happening around you can impact cryptocurrencies. So, it’s wise to be aware of global events with the possibility of influencing the crypto market.
- Understand how it works: As a newcomer, you must first learn how to buy and sell cryptocurrencies. Your job is to identify platforms that facilitate such transactions. Since mainstream adoption of digital assets is still ongoing, it’s going to be a matter of time before crypto transactions become seamless and frequent. Until that happens, you need to stay patient and find out how you can convert the crypto you bought into cash.
- Beware of scams: Stories of crypto exchanges getting hacked, like the infamous Mt. Gox incident, are not new. Social media is flooded with stories about how new cryptocurrencies have ushered unprecedented returns for investors; don’t get carried away by these revelations. You will be shocked to learn that thousands of scammers are waiting just to lure you into a Ponzi scheme to siphon your funds.
- Have a strategy: It’s not enough to show an interest in crypto investment; you need to have a proper plan in hand. Smart and successful crypto investors set limit orders to minimize losses. By doing so, they ensure that their assets will be automatically sold off whenever prices dip to a certain level. It’s not a bad idea to emulate the trades carried out by successful traders. The right investment strategy can be the key to protecting your hard-earned income.
- Beware of FOMO: The biggest reason why people are jumping onto the crypto bandwagon is the fear of missing out. But the truth is that more often than not this impulsive behavior comes with a price. The crypto market can be tempting but you should look to impartial investor reviews and independent news sites when making a decision. When you see popular coins skyrocketing, stop yourself from impulse buying. Usually, a sudden, sharp rise is almost invariably followed by a major crash.
- Diversify the portfolio: Never keep all your eggs in one basket; this is a thumb rule in crypto investing. Ignore the smooth-talking scammers and die-hard believers; invest in multiple coins to mitigate the risks. And, remember never to invest more than you can afford to lose.
- Protect your money: You must find a secure wallet for storing your crypto coins before you start buying these. It’s best to choose a hardware or offline wallet that is better equipped to keep your money safe.
Use these easy-to-follow tips when it comes to making crypto investment-related decisions. Cryptocurrency and blockchain are innovative and disruptive technologies, but you must proceed with caution. The biggest challenge for you is how to avoid getting trapped in the frenzy. Cryptocurrencies are volatile and unpredictable; so, never dive into them without doing proper research and reading a coin’s whitepapers in depth.
