While digital currencies have now become some of the hottest investment opportunities, if you are a new investor, you always face the risk of losing your capital. This mostly happens if you venture into an unknown new cryptocurrency with no track record or scammers end up luring you.
If you have always wanted to invest in crypto, don’t jump the wagon just yet. Here are some important things you should know before you put your money in the cryptocurrency market.
Watch Out for FOMO
Popular cryptocurrencies experience sharp highs and lows in terms of prices. Don’t let the fear of missing out make you do rash things. Always proceed with caution because buying crypto at high prices may result in nasty losses if you aren’t too careful.
Develop a Sound Investment Strategy
The most successful investors develop a plan for their crypto assets. It can involve implementing a limit order, or the automatic selling of Bitcoin when prices reach a certain level. Certain crypto exchanges also let you imitate the moves of established crypto traders.
Research and Be Familiar with ICO
Initial coin offerings or ICO is where companies sell and create new cryptocurrencies that rose to popularity in 2017. While the market has now cooled down, there are still existing investment opportunities.
It can be very risky and if you want to go down the ICO route, don’t forget to carefully read white papers and determine if their business needs blockchain technology.
Stay Away from Something Too Good to be True
Before you invest in crypto, always remember that something that seems too good to be true probably is. There are tons of impartial reviews in the crypto industry and to make informed decisions, refer only to certified independent news sites.
Choose a Good Crypto Exchange
Always search for a crypto exchange with strong liquidity levels, resilient security measures, reliability, and a variety of crypto assets.
Keep Your Private Keys Protected
When it comes to crypto investment, your top priority is to always ensure the safety of your crypto assets. A hardware wallet is one of the best ways to achieve this level of security where your assets will be held securely.
Timing Matters the Most
Digital assets can be quite volatile and different cryptocurrencies like Ethereum and Bitcoin can fluctuate significantly with little notice. Crypto investors, in general, try to “buy the dip,” which means that they will buy more of an altcoin once the price falls.
Be Wary of Scammers
Social media is filled with a lot of hype about investment strategies promising huge returns from vague crypto assets. Some even make out of this world claims about the potential increase in Bitcoin prices. Unfortunately, the crypto world is also crowded with dishonest people. Always tread with caution.
You Can Use Old-Fashioned Money to Buy Crypto
Cryptocurrency exchanges are tailored to the new breed of investors. They let you use your debit card, bank account, and credit card to purchase virtual currencies. Financial institutions also plan to get involved.
Always keep these pointers in mind to have a successful crypto investment!
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