7 Dos and Don'ts When Investing In Cryptocurrency

by Andrew McGuinness     Jul 16, 2019

Bitcoin has been around since 2010. By now, you’d expect a lot of people to be experts at crypto trading. And yet there are so many traders who lose their coins or profit because they don’t understand when, why, or how to sell (or hold) their cryptocurrency.

Trading cryptocurrency isn’t any less complicated than trading physical valuations. You’re still risking thousands of dollars that could either make you a lot of profit or broke. Below are 7 dos and don’ts when investing in cryptocurrency:

1. Do Research On Your Own Info

The media doesn’t like talking about cryptocurrency, but that doesn’t mean that everyone else’s opinion should affect yours. Let’s face it: cryptocurrency is still very much in its early stage. It’s been around for a while, sure, but the full potential of digital currencies haven’t been maxed out. Most people don’t believe in it because it’s new and volatile...not that either of those things should repel you from investing.

2. Don’t Stick To The Big Waves

Bitcoin is the biggest cryptocurrency as of now. While it may feel like the train has already left the station, know that there are tons of cryptocurrencies out there. Find emerging assets instead of popular ones, and invest in them--that’s trading 101! Search those that are cheap but have a pattern of consistent increase in market value.

3. Do Watch Out For The Dips

Cryptocurrency is a rather volatile industry… not that it’s a bad thing. Volatility in trading means the price fluctuates a lot. Because cryptocurrency isn’t regulated by a company, a brand, or anything and is dependent entirely on supply and demand, there is no way to determine when the price will fall. Simple-minded investors will just buy crypto at the current price while smart investors wait for a dip in the price after a long surge for more profit.

4. Don’t Store Everything Online

Investing a couple hundred dollars might be no big deal now, but once you hit millions in profit, you might want to move your digital coins somewhere safe. Think of it like this: you wouldn’t leave your wallet in an unsecure area, so why should you leave your digital coins online? Sites get hacked and money gets stolen. Opt for a hard wallet like Trezor.

5. Do Know Your Money Is Lost Anyway

Like any other investment, putting in big bucks into cryptocurrency is only going to feel horrible if you start losing money. More so, if you start losing money you can’t afford to lose. Before you even spend on a single coin, understand that your money is lost anyway, up until it’s time for you to cash out. Then you can enjoy your millions!

6. Don’t Get Into The “It’s Too Late” Mentality

Most people stop trading when they see coins are worth above a certain price. It’s this limited, short-sighted mentality that leads people to lose millions of dollars. If you didn’t buy a coin when it was $10 and is now at $100 each, do now that there is never too late to invest.

7. Do Hold Onto Your Coins

While trading is a natural skill for some people, there are still individuals who don’t understand the highs and lows of the market. That, or they just have bad timing. If you’re one of the people who have no idea on how to trade, then just keep holding on to your coins. After the exchange, don’t do anything to them until you’re ready to cash out. It’s the safest way to maximize profit and minimize risk.

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