Investing in cryptocurrency can be a little tricky. It’s easy to earn big but if you’re not careful, you can lose money twice as fast. That’s why you need to be both optimistic and cautious when investing.
Here are some things to keep in mind to make the most of your crypto investment:
Set Your Limits!
It can be tempting to “go big or go home” in crypto, especially when you look at the HUGE numbers from popular currencies like Bitcoin and Ether. However, you should remember that there’s a lot of risk involved in crypto—you just never know when the market will crash.
You need to be strict about setting your limits. Once you reach that threshold, either stop or reevaluate your risk appetite. As the old saying about investment goes: only invest money that you can afford to lose.
Low Prices ≠ Good Buy
Investing isn’t like shopping, where every price drop means a good bargain. Sometimes, a cryptocurrency’s value drops because the user rate has declined, or developers have stopped working on it so it has become less secure. Big investors may have also lost confidence in it, which is definitely a bad sign.
Be Prepared for Fluctuations
You’ve probably heard this more than a couple of times before, but it should be repeated anyway: cryptocurrency is volatile. Prices can swing one way or the other and they can do so dramatically. You have to prepare yourself for these heart-stopping moments. Be a rational rather than an emotional crypto investor and you will prevail!
Diversify
Much like stocks, you shouldn’t put all your investment into one product. Shop around and see which digital currencies are worth putting your money into so you don’t overexpose yourself to risk. At the same time, this will allow you to take advantage of the gains of other currencies.
Research, Research, Research
Don’t go into crypto blind! There are plenty of resources online, from articles to helpful videos that can help you understand crypto better. The more you know, the more you can make wise decisions!
Last but not least, protect your exchange accounts, mobile wallets, email, and any other profile that you use for investing. Cryptocurrencies are complicated technologies and are difficult to hack, but that doesn’t mean the cybercriminals won’t try! You should also be aware of scams like fake apps and scam emails so you can avoid them.
References:
Six cryptocurrency tips (and five mistakes to avoid) - Times Money Mentor (thetimes.co.uk)
Eight Tips Every Cryptocurrency Investor Must Know (forbes.com)
