“You can’t afford to miss out on this.” This is the phrase that has been echoing in my head over and over again for the past few months. As I scroll through social media, I find myself bombarded by ads, blog posts, and news stories about cryptocurrency investing.
It seems like everyone is talking about it. But what should you do if you want to invest? What are some rules of thumb to follow? This article will discuss the top 10 tips that will help you make smart investments and avoid common mistakes.
Let’s take a look at them.
1. Invest only what you can afford to lose
This is the golden rule of investing in cryptocurrency. You should never invest more than you can afford to lose, especially if your investment goal is long-term. Cryptocurrency markets are unregulated and highly volatile, which means that even a small market correction could wipe away all your earnings within days or weeks.
When it comes to crypto investments, always keep this simple principle in mind: “Don’t put all eggs into one basket.” For greater productivity, you can choose to use Immediate Edge trading software.
2. Never Trust Online Advice about Crypto Investment
The saying goes, ‘If something sounds too good to be true, it probably isn’t real. This applies here as well because so many online gurus claim they have made millions from Bitcoin, but no one knows their credentials for giving investment advice. So, always do your research and don’t invest in something blindly.
3. Diversify your portfolio with multiple cryptocurrencies
While the top two coins dominate, it’s crucial to diversify your portfolio. Find a range of altcoins that could outperform bitcoin and invest in those as well. Many crypto experts recommend having at least 20% of your investment portfolio be made up of smaller cryptocurrencies like NEO or Dashcoin to ensure you have enough diversity for gains.
4. Keep an eye on market trends but don’t obsess over it
Cryptocurrency is still a relatively new phenomenon, which means that the market is constantly changing. It’s important to keep an eye on market trends, but don’t obsess over them; otherwise, you’ll end up making irrational decisions based on emotion rather than reason.
5. Know when to sell
It can be tempting to hold on to your cryptocurrency investment for dear life when prices are skyrocketing, but this isn’t always the best strategy. Sometimes it’s wiser to sell off a portion of your holdings and take your profits than to keep all of your eggs in one basket. If you think the market is headed for a downturn, sell before it happens and protect your investments.
6. Educate yourself before investing in anything new
Cryptocurrencies are still a new investment, and it is important to educate yourself before investing in them. Learn about the technology behind cryptocurrencies, the different types of coins available, and how they can be used. The more you know about cryptos, the better prepared you to make wise investments.
The Bottom Line
Cryptocurrency investment is still in its early stages, so there are a lot of opportunities to make money. However, it’s also important to be smart about your investments and take precautions to protect your money.