Investing isn’t easy; you need to have the knowledge and skill to be successful.
However, when it comes to cryptocurrencies, you don’t need to get educated in a top-grade business school to start investing in it.
Which is the beauty of digital money: it’s so simple to do. However, there are things to keep in mind if you want to be successful in what could possibly be your first major investment victory. We’d like to share five things you should remember to do so.
1. Only invest what you’re willing to lose — If there’s one lesson we can learn from what we can call the ‘Bitcoin crash’ of January 2018, it’s the fact that putting all your eggs in one basket isn’t a good idea. True, the cryptocurrency market is highly-volatile and highly-enticing, it would be wise to be cautious as well. As blockchain and fintech enthusiast Kenny Li put it, “as soon as your money is converted into cryptocurrency, it is gone forever; there is absolutely no guarantee you can get it back.” Aside from volatility, keep in mind that bugs, hacks, and regulation may affect the market.
2. Diversify your investments — Speaking of those eggs in one basket, it will be a better idea if you spread out your finances in a few cryptocurrencies. One asset’s fate wouldn’t exactly be the same with the rest; a certain cryptocurrency’s value may plunge steeply, but others may not dive that much. It is imperative to have a safety net to protect you against any untoward circumstances.
3. Research before believing the news — When cryptocurrencies lost a lot of steam recently, many sounded the death knell for it. However, it is widely believed that the market is only undergoing a correction — a normal occurrence in any trading arena and that it is going to stabilize. To a certain extent it has, and it is forecasted that it will gradually go up again shortly. Negative will always be assumed about the popular, but you have to keep in mind that the right and information is always vital in playing a fair game. “Assume you are wrong unless the market proves you correct,” Michel Gerard, an entrepreneur, and author, wrote on Steemit.
4. Learn from your mistakes (but don’t let it discourage you) — In the unfortunate event that something terrible happens to your crypto investment, don’t take it too harshly on yourself. Remember, you signed up for it in the first place, so it is assumed that you are aware of the risks involved. Take it as a lesson learned and make yourself a better and wiser trader out of it.
5. Don’t invest just because a lot are doing so — It’s natural for humans to be interested in something popular to the extent of being actually part of it. “Indeed, it really isn’t fun to see such situations from the outside,” Yuval Gov wrote on CryptoPotato, in which he discussed the ‘fear of missing out’ (FOMO). Getting on a bandwagon, to use a crude metaphor, can cause you to fall off if you don’t know what you’re doing. Better study the entire situation — don’t let handsome profits blind you — before taking that huge investment step.
As a parting shot, cryptos are very tempting. And while they are indeed, it’s always better to play it safe.
