10 Things You should avoid while Investing in Crypto in 2022
You’re probably eager to trade if you’re just getting started. I understand it. Do not hurry, though. Spend some time learning about crypto trading and developing a basic trading strategy.
Do you have a basic understanding of Bitcoin and the blockchain?
Understand the concept of “circulating vs. total supply.”
Are you familiar with the concept of inflation?
What do you know about the various types of wallets and exchanges?
If you’re unable to answer these questions, you’ll find yourself in a predicament quickly.
Spend some time getting yourself ready.
Make use of the tools available on our site to learn the essentials.
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1. You Don’t Own a Hardware Wallet
If you’ve invested more than $500 in cryptocurrency, then a hardware wallet is a worthwhile purchase.
They are not linked to the internet, so hackers can only get your money if they take your gadget and the passcode to access it. As a result, maintaining security is a lot simpler.
With a big enough budget, perhaps $5,000 or more, you can consider purchasing two. It can serve as a backup in case you misplace the first.
Hardware wallets like the Ledger Nano S are very safe, dependable, and user-friendly.
2. You Don’t Know Best Security Practices
Keep in mind that the wallets and websites you use to store your money include your most private and sensitive information.
If your accounts are hacked, you’ll lose all of your money. Take security seriously and learn from others who have had to make mistakes before you do.
Make sure you do the following while utilizing a wallet, hardware, or desktop:
- Stay away from free public wifi
- Using unprotected software/extensions should be avoided
- Make sure your passwords are strong.
You should also avoid using your regular email address to do business in the cryptocurrency market. Investing in cryptocurrencies requires a separate wallet.
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3. You Don’t Back Up Your Sensitive Information Always back up both 2FA and wallet data
Without a backup of your private keys, seeds, or passphrases, you’ll be unable to access your bitcoins if you lose your computer.
If you lose your phone and don’t have a secure duplicate of your 2FA keys, you’ll be locked out of your exchange accounts.
Make sure to read and follow the guidelines carefully provided by wallets and exchanges.
You should back up your 2FA keys so that if you lose your phone, you’ll still be able to log in to all of your accounts.
It will be a tremendous hassle and time-sucker if you neglect to do this.
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4. You Fall for Scams
Keep an eye out for oncoming traffic. Scammers exist in the cryptocurrency world, and they’re becoming better and better all the time.
Here are some tried-and-true methods for avoiding frauds, even though I know you aren’t an easily duped elderly lady:
- Make sure the links you’re clicking on are valid URLs. It’s possible to include a URL in the text.
- Clicking on a vulnerable link, such as a wallet, might lead to an unexpected destination. Google and watch what occurs if you doubt my claim. By right-clicking on a link and copying the URL address, you can inspect the URL included in the link in a new tab. However, do not hit the Enter key.
- Recheck the URLs you arrive at. You never know what you’ll discover. Coinbase can be replaced with coinbase.com, for example. These websites are designed to swindle you.
- Be wary of ‘quick money schemes. There’s a hidden fraud behind every promise of internet riches. Such scams include the well-known Ponzi schemes.
- Case for Bitconnect. Always keep in mind that great possibilities don’t come to you in the form of a freebie.
- Use Google and online communities to get answers. Using Google, you can find out whether a website is a scam by searching for [“Website” + Scams] or [“Website” + Review].
5. You Don’t Find a Reliable Community to Learn With
When things go wrong in the bitcoin world, you can turn to online forums for help.
There is no substitute for being among like-minded individuals, especially if you are having difficulties with an exchange or if you have concerns about the core worth of Bitcoin.
You can also get a steady stream of cryptocurrency sentiment from these groups, which can help you maintain tabs on the sector.
Some of the best Facebook groups to join are those devoted to cryptocurrency investing, such as Cryptocurrency Investing and Crypto Coin Trader.
In the absence of Facebook, you can use Reddit, BitcoinTalk, and Uptrend to conduct your search for relevant information.
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6. You follow shills
Many people use the term “shill” when they’re paid to spread the word about an item that’s either excellent or bad.
So many influencers and bloggers have been guilty of pushing bad or even fraudulent cryptocurrency because of their selfish motives. I won’t mention anybody in particular.
They can have been compensated or have other interests (such as owning a large number of coins or knowing the owners) to assess a cryptocurrency; but, your decision to accept their advice will be your own.
7. And crowds
Crowds prefer to gather around well-known shills. You’ll notice groups of people talking about a currency in unison if the influencers have thousands of followers.
A crowd shilling a single currency might result in Facebook threads, Twitter threads, and Bitcointalk discussions.
Do not mindlessly follow them. Keep an ear out for the commotion, but do your homework on the currency.
My apologies if it turns out that the currency is promising. You can have already lost out on a great investment opportunity.
Meanwhile, if you’re a cynic who believes there’s nothing new under the sun, hold onto your currency since its value will eventually plummet.
As an example, consider the ICON coin. There was a lot of interest on large forums and social media, and a lot of individuals bought in.
The price had dropped 98 percent a year later when the buzz had faded.
When everyone is talking about a certain cryptocurrency, it’s a good idea to get rid of it.
Also, See: Predictions for the Price of Bitcoin (BTC) in 2022
8. You Enter Positions You Can’t Exit
An illiquid market is one in which no one wants to purchase your currency.
If an asset can be purchased and sold with ease, it is said to have high liquidity. On CoinMarketCap, you can see how liquid a currency is by looking at its transaction volumes.
Cryptocurrency relies heavily on liquidity. What if you believe that the bitcoin market is doomed?
Consider this: if you believe the value of a certain cryptocurrency is likely to soar, would you have the resources to invest in it now?
Suppose you’ve run out of money because of a personal emergency?
A timely exit from your position is essential in any of these instances. To locate customers, you can have to cut the price of the coin you need to sell.
In the worst-case scenario, you might lose all of your money if your cryptocurrencies are unable to be exchanged.
The more volatile a currency is, the less liquid it is.
A cryptocurrency with a low daily trading volume is not worth your time if you’re a novice.
How Effectively Do You Utilize Coinmarketcap?
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9. You FOMO (fear of missing out)
Fear of missing out (FOMO) is a widespread sentiment in the cryptocurrency community.
Investors that fear they can miss out on a great opportunity, and as a consequence, acquire an asset to join the bandwagon, are referred to as having FOMO.
People that are involved in a project or investment can use Twitter to persuade others by saying things like “Huge news released next week” or “Big relationship with a big bank to be disclosed shortly.”
In addition, many shills will take advantage of the fear of missing out by telling their audience that a specific cryptocurrency is the next great thing, that its price is surging, and that if they don’t get in now, they will regret it forever. Investors are encouraged to act impulsively, resulting in the term “Fear of Missing Out” (FOMO).
Analyze the facts, not the chatter. Logic, not emotion, should guide your investing choices.
10. You Fall for FUD
FUD, on the other hand, stands for the opposite of FOMO: dread, apprehension, and doubt. Selling, not buying, is the end purpose of FUD.
Because of this, it’s common for the Shiller(s) to broadcast negative news about the project, such as hackings and team changes, to generate panic selling and a loss of trust in the project.
Logic is once again required. Don’t behave rashly until you’ve figured out what they’re trying to tell you.
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To Sum it Up
Another simple reason for selling is that the price has dropped rapidly, which is unrelated to fear-mongering. Nevertheless, this does not imply that the price will go down anymore.
Don’t hurry the sale. Discuss cryptocurrencies with your buddies over a cup of coffee.
Control your emotions and rethink your choice before making it. This is a risky market, so be prepared to take substantial losses.
Financial Disclaimer
The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our Article constitutes a solicitation, recommendation, endorsement, or offer by HII or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
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