Tech

5 Tips Every Cryptocurrency Investor Must Know

The cryptocurrency industry is full of money. It’s huge!

Want to start earning some extra income by trading cryptocurrencies such as Bitcoin and Ethereum? If you do then you need to first learn the 5 tips that every cryptocurrency investor must know.

So, what is cryptocurrency? It’s a digital currency that’s based on a cryptographic (secured) system.

The first cryptocurrency, introduced in 2009 by one pseudonymous Satoshi Nakamoto, was Bitcoin (BTC). It is often regarded as the first decentralized cryptocurrency.

When it was launched over a decade ago, one bitcoin was worth far less than a dollar. But as of May 13, 2020, one bitcoin was worth roughly $9,000.

That’s a lot of money. Isn’t it?

5 Tips every cryptocurrency investor must know

Cryptocurrency sounds like a gold mine for anyone to make money. But the business is very volatile.

As a beginner, it’s not advisable to invest in cryptocurrencies without knowing some essential tips. Making a bad decision may see you lose your investment within the blink of an eye.

Here are 5 tips every cryptocurrency investor must know:

·       Don’t Invest Money You Can’t Afford to Lose

As you may know, everything in life is risky. However, crypto trading is riskier than many other investment methods.

The high volatility of cryptocurrency means that it’s easier to make a profit during a market boom (or “pump”). Similarly, a market can crash within hours, leaving you with huge losses.

For example, if you buy 1 bitcoin today at $9,000, don’t be surprised to see the price suddenly plummet by more than half the next day.

Since you can’t fully predict the next day’s price, it will be unwise of you to take out a loan to pay for cryptocurrency investments.

If you must invest in bitcoins, always ensure that the money is something you are ready to risk—and lose.

·        Investigate the Market

Crypto trading isn’t for busy people who have no time to study the current market trends. To beat the market, you need to pay close attention to the markets.

Stay informed by following reputable crypto websites/journals.

Twitter and Google may also be your best knowledge resources.

NB: You don’t have to trust all cryptocurrencies.

Scandals continue to plague the crypto industry.

Whether you want to invest in a new ICO (initial coin offering), or you want to buy bitcoins from exchanges — always check reputable websites to confirm the authenticity of the project.

The bottom line: study the whitepapers, and always watch out for scams.

·       Don’t Be Stopped by Naysayers

There are a lot of conspiracy theorists who would do anything to make you believe that the idea of cryptocurrency is overrated. However, it’s not at all true to say that bitcoin is a floating bubble or a pyramid scheme.

Cryptocurrency and blockchain technology keeps on gaining momentum despite facing resistance from some governments.

It’s true that for more than a decade already, BTC has been fluctuating in value, but the bubble is yet to burst.

If you think you’re ready to invest in bitcoins, stop at nothing to make your first investment. Ignore the naysayers and follow your instincts.

You can buy bitcoins on nakitcoins.com at fair prices.

·       Avoid Bad Trades

Crypto newbies are tempted to make bad investments by following so-called “pump and dump groups”. These are social media channels that encourage traders to buy particular coins around the same time so that the price will increase (pump) before they sell (dump) their own investments leaving others to suffer the losses.

Unfortunately, At the end of the day, only a few traders will emerge as winners while others will lose big.

These groups can contribute to your quick downfall. Stay away from them.

·       Diversify Your Investments

You do not want to empty your wallet into only one investment. That could be a potentially catastrophic decision.

To minimize your risks of losses, diversify your investments by buying different coins. This way, while one coin is falling in value, another may be rising.

When it comes to trade exchanges, you still have to diversify your accounts to avoid losing it all in case a wallet provider suffers major security breaches.

Other Interesting Facts to Note About Cryptocurrency Investment

·   Governments are fighting hard to restrict crypto. They fear its decentralized nature.

·   Crypto trading may be a bad idea for you if you lack knowledge and experience.

·   Some crypto businessmen are worth millions and billions of dollars.

Examples are Chris Larsen (co-founder of Ripple coin), and Joseph Lubin Lubin (co-founder of the Ethereum coin).

Conclusion

The future of cryptocurrency is not certain. But that shouldn’t stop crafty investors from making fortunes in crypto.

On the other, it’s easier to lose than to win.

Though losing is all part of the game, you don’t want to always be on the losing side.

Therefore, do some proper market analysis to know when to invest, and when to move out before the market crashes.

Happy trading!

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