One of the biggest challenges investors have when it comes to cryptocurrency is to not get caught with the hype social media have been laying out. Moreover, cryptocurrencies may be a significant step into the evolution of the internet, but the complexity of the asset may find investors difficult to assess. If you have decided to invest in crypto, it’s crucial that you have to do thorough research before venturing into the cryptocurrency market. Below, we’ll explore the top 7 things you should know before you invest.
1. Don’t Ever Invest More Than You Can To Lose.
If you’re venturing into the world of cryptocurrency, you will have to jump in a while fully aware of the possibility that you might lose it all. This is why the best advice you’re going to get is to only invest the amount that you’re comfortable losing. There may be some instances where an investor will be blessed with beginner’s luck, but the cryptocurrency market is unstable, and there’s still so much to learn and consider.
2. Bitcoin Is Not The Only Cryptocurrency
For people who recently started to learn about cryptocurrency, the most common myth out there is that Bitcoin is crypto, or Bitcoin is the only form of cryptocurrency out there. However, Bitcoin still holds the crown of being the most successful crypto as it recently hit the market cap of 1.7 trillion dollars as of May 2021. Alternatively, there are more popular altcoins as an option for crypto investing, such as Etheruem, Chainlink, Ripple, among several others.
3. The Crypto Market is Not Predictable
Trading or investing with cryptocurrency will come with some doubts and uncertainties. This is why the crypto market is not predictable, as it’s hard to spot any pattern when it comes to the fluctuation of its market value. Thus, the overall worth of crypto cannot be defined if based on the past or the asset’s current value. Still, it does not mean that this type of market doesn’t have any value anymore. You only need to be careful.
4. Never Invest Out Of Fear On Missing Out
Despite its debut more than a decade ago, new forms of cryptocurrencies are still launched with a lot of hype. From celebrity endorsements to assertive public relations campaigns, the hype would force new and old investors to blindly jump in on the idea without thinking of the potential risks as they fall victim to the fear of missing out.
5. Do Your Own Research
Doing your own research applies to any form of investment, especially cryptocurrency. Don’t ever believe in those online gurus claiming they have the formula for success when it comes to investing in crypto. Those types of individuals make their money by selling information that is sometimes not that accurate, and they wouldn’t care less about whether you succeed or not after you’ve already paid them.
6. Acknowledge The Risks Involved
While it’s undeniable that the possibilities for investing in crypto are there, there are also a lot of risks to think about, whether it’s an investment or a transaction. Initially, the decentralized nature of crypto comes with cons, as it comes with no government protection due to a lack of government backing. While the blockchain has not been hacked so far, there are already records of theft from exchanges that sell and buy crypto.
7. Keep Your Keys Safe
The most important thing to know before getting into the cryptocurrency industry is to always keep your private keys safe. Your private keys are the only way to access the crypto coins in your wallet, and there is no other way of accessing them if you ever lose the keys. Moreover, never store your keys on your computer and leave them out in the open as there’s a chance that someone might steal them from you.
Aside from cryptocurrency, Blockchain technology is still in its infancy phase. However, that is changing faster than ever. Moreover, cryptocurrency still offers profitable opportunities for new and old investors, apart from its primary purpose of security, anonymity, and a reliable financial network. When it comes to investing in cryptocurrency, they must understand the asset thoroughly and how it differentiates from other forms of investment to avoid a costly mistake. You can have a great starting point with many trusted crypto trading platforms.