5 Steps to Know in Crypto Investment

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The best investment tactics often come from investors who have been in the cryptocurrency market for years.

Any beginner can learn how to avoid common mistakes in investing in cryptocurrencies.

Here are six crypto currency tips as reported by thetimes.co.uk:

1. Have a strategy for crypto transactions

It’s not easy to find a genuine cryptocurrency recommendation from a fraudulent one. There are lots of sharks out there waiting to take your money.

In 2020, according to UK fraud alert service Action Fraud, reports of crypto investment fraud jumped 57% YoY to 5,581, with investors losing a total of £113 million or equivalent to IDR 2.535 trillion (£1 equivalent to IDR 19,060).

So when you are faced with a lot of information about cryptocurrencies, research them carefully.

Try to look critically at the project. How many users have it? What problem does it solve? Is there any connection with the industry? Avoid coins that promise fantastic things but have yet to deliver anything tangible.

2. Managing risk

Some people who offer crypto trading tips may not suit your interests. So don’t get stung by making the same mistakes as others.

Set limits on how much you invest in a particular cryptocurrency and don’t be tempted to transact with more money than you can afford.

Cryptocurrency trading is a high-risk business and more traders lose than the other way around.

There is no point in investing too much in one single cryptocurrency.

As is the case with stocks, spread your money across multiple cryptocurrencies.

This means you are not taking a high risk if one of them falls in value. Moreover, the market price of this investment is very volatile.

There are thousands of cryptocurrencies to choose from, so do your research.

4. Invest for the long term

Cryptocurrency prices can go up and down quite drastically from day to day. Beginner traders are often duped into panic selling when prices are low.

Cryptocurrencies never go away, and investing your money in the market for months or years can offer you the best returns.

5. Use of trading bots

Trading bots can be useful in some circumstances. However, bots are not recommended for novice traders. Oftentimes, these bots are simply scams in disguise.

If there was a real algorithm that perfectly timed your buy and sell trades, everyone would use it!

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