Common crypto mistakes
Whether buying cryptocurrency for trading or holding as a long term investment, there are pitfalls to beware of. Many people have been drawn to the cryptocurrency space from stories of rocket gains and buyers being made into overnight millionaires. As a result, a lot of mistakes are made in the haste of chasing fortunes. Watch out for these common mistakes to optimize and protect your investments.
The first mistake that needs to be addressed is the act of hastily buying a coin or token near or at its peak price after witnessing the rush to buy. The term FOMO is an acronym for Fear Of Missing Out and in this case it refers to the fear that tends to push the market when the public throws their money at something before missing the boat. In a less than mature market with huge price swings, people are often left chasing gains and following hype rather than research.
Another problem that can affect veteran traders just as much as newbies is selling at a low point. As the crypto market experiences its roller coaster ups and downs, holders sometimes let fear overwhelm them and sell their coins for a much lower price than what they bought for. Cryptocurrency is not near mass adoption yet; therefore, most people who are buying are doing so as a speculative investment. Many of those holding Bitcoin or altcoins are hoping for massive returns and tend to be soured by bear runs and sell in a panic. Those who panicked and sold their Bitcoin bags in 2015 missed out on a potential of millions as the coin bounced back and nearly hit $20,000 in 2017. Many made the same mistake in 2018 as the market corrected only to see the coin begin to recover as the year went on.
When sending cryptocurrency from one wallet to another, always be sure to check the addresses you are entering. When dealing with an exchange wallet that could include dozens of coins and tokens, it can be very easy to select a different coin and copy the address of the wrong coin. If a user intends to send Bitcoin but selects and copies an Ether address instead, the loser may lose these coins forever if they actually hit send. Even just making a typo when inserting crypto addresses will result in the loss of the funds so users must be diligent when entering addresses.
Unfortunately, a question that is asked a little too frequently on crypto message boards and forums is “What should I do if I lost my private key?” Other popular iterations of this excruciating question include terms like “seed phrase” or “12 words”, but the askers are always begging for a way to unlock their wallets to access various amounts of their precious crypto.
To avoid making poor investments, losing funds, or getting robbed, or is important for crypto users to be rigorous in their research and meticulous when moving their money and setting up the security of their assets.
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