Chapter 7: Investing Tips & Tricks for Beginners
The benefits of cryptocurrency
Some of the main benefits of crypto are its anonymity and its safety. It’s seen by many to be an ideal and ethical form of currency and exchange. In other words, because it’s decentralized, it’s separate from a state, government, or institution (unlike your typical national currencies).
Therefore, the politics and agendas of our leaders should not (in theory) affect cryptocurrency were it to eventually become a global and mainstream way of transacting. El-Salvador, for instance, was one of the first countries to accept bitcoin as a legal form of currency and monetary exchange.
Another important benefit is that cryptocurrency runs on blockchain technology which (again, in theory) means that it is technically unhackable and therefore, an extremely safe way for you to invest or to hold your financial assets.
If you’re new to it all and want to start investing in crypto, it’s important that you equip yourself with the necessary tools and information to have a successful experience. This chapter of Crypto Fundamentals is all about the starting tips and tricks you could use to your advantage.
Keep in mind that “haste makes waste”
New investors tend to make the mistake of pulling out of investments too soon. Some currencies, especially in the case of Bitcoin, are long-term investments. You might see some losses in the short term, however, if you keep investing your time and patience, you’ll reap the benefits in the long run.
Balance your portfolio
Balance your portfolio and invest only what you can afford to lose. A good investor knows where to draw the line and makes smart choices. Don’t put too much in and expect to rely on the results for financial success. Taking all necessary precautions is essential for any beginner investor.
Get professional advice if necessary
Although doing research and reading articles are critical sources of information, it is advisable to not rely on information alone when making your decision on cryptocurrency investments. Talking to experienced individuals in the trade can really help put things into perspective. And remember, if your business is involved, you should seek support from your team.
Be aware of taxes
Taxes are significant for professionals making a living in this financial world. Long-term investing can be more rewarding for investors from a tax perspective. Some accounting mechanisms are not available to traders or investors who trade more frequently. If you are trading only on rare occasions, the number of times you sell your assets is far less than a trader’s. That alone can lower your taxes when they are due, so you have to keep these aspects in mind.
Don’t choose from just one crypto market and don’t go with the lowest cryptocurrency coin just to play it safe. You may instead end up losing more than you bargained for. Don’t be afraid to choose from various markets and take a chance on coins that are costly after doing your research and tracking its progress.
Now that you know these basic tips, you are one step closer to securing your investments and success. Cryptocurrency is here to stay, and if you start your investments today, you’ll be able to reap the rewards in the long term.
Browse the currencies that appeal the most to you but, as a final reminder, do your research before leaping. Remember, just like with any investment, it pays to be cautious and consider all your options before diving in.
The Crypto Fundamentals series is designed to help you get a head start as a beginner investor, so be sure to read more on our blog. If you feel ready to embark on this journey, Your Friendly Crypto Exchange, IXFI, is here for you, so give it a try.