As a newbie Cryptocurrency investor, you’ve undoubtedly been asking yourself questions like:
- Did the bitcoin bubble explode?
- Is it too late to get started? and
- What are the best strategies to be successful in this ever-evolving investing space?
While you’ve been thinking about these things, you must have also observed the Cryptocurrency market’s volatility. However, despite every news related to Cryptocurrencies, whether for or against, we know that it is far from dead, and the road to Cryptocurrency investing nirvana is more promising than ever.
So, before you start your journey to Crypto investment, here are a few must-know tips that you can consider before investing. Read on!
If you want to learn about Crypto terms and phrases, here’s a short guide.
5 Must-know tips for Crypto investors
- Invest what you can bear to lose
Invest in Fixed Deposits, Mutual Funds, SIPs, Debt Funds, insurances, and emergency funds to ensure your long-term financial stability. If you still have money after this security, you can surely invest in Cryptocurrency because this is money you can afford to lose while being financially unaffected.
- Perform your research
It’s easy to invest blindly based on recommendations from friends or relatives. However, keep in mind that it is your money, and no one will rush to your aid if the investment fails. As a result, it is preferable to thoroughly understand the Cryptocurrency market before putting any money into it. First, learn about Bitcoin, Ethereum, Tether, Polygon, and other popular Cryptocurrencies. Then, before making any investment decisions, learn about their use cases and possibilities.
- Choose a reliable & trustworthy exchange.
Cryptocurrency exchanges are frequently hacked or can be used to mislead investors. Therefore, ensure that you open an account with a big exchange with a proven track record and that you have insurance coverage in place in case of a hack.
- Get acquainted with the technicalities.
If you’re serious about Cryptocurrency investing, it’s a good idea to learn how to design your digital wallets or buy a reputable hard wallet to protect your funds. Then, to enhance your expertise, learn about liquidity mining, staking, decentralized money, and more.
- Be cautious of scammers.
Scammers are continuously on the lookout for methods to cheat investors of their money. Fake airdrops, pump-and-dump scams, and messages from social media accounts should all be avoided. Scammers also use imposter websites to scam investors.
Before submitting your information, double-check the exchange’s URL. Always download trading applications from reputable sites such as the Google Play Store or the Apple App Store. Connecting with other Crypto fans and influencers on social media is beneficial, but never make investments based on their recommendations.
Before investing, keep these tips in mind and be always in alert mode.
5 mistakes to avoid as a newbie Crypto investor
When you start your journey into Crypto trading, making mistakes become inevitable. But, here, we have listed down five mistakes that you can avoid as a newbie investor. Check them below:
- Investing just on the grounds of a low price
Low pricing might not necessarily imply a good deal. However, prices are sometimes low for a cause! Keep an eye out for coins with dropping user numbers.
Frequently, developers abandon a project, and it fails to be upgraded, keeping the Crypto insecure.
- Putting everything on the line
Some advisors may advise you to bet as much as possible to maximize your profits. But, beware, there are chances that you may become bankrupt.
Better Crypto investment advice would be to limit your investment money to a particular percentage — say, 5% or 10% — and the rest of the money you can have in your savings account will act as your emergency cash reserve.
- Believing that Cryptocurrency is “easy money.”
Making money by trading any financial item, whether stocks, shares or silver and gold, is not simple. But unfortunately, Cryptocurrency is in the same boat.
Anyone who claims otherwise is more likely trying to trick you into making Crypto mistakes.
- Losing track of your Crypto key
If you keep your Cryptocurrency in a hardware wallet, forgetting your key is like dropping the keys in a safety deposit box.
If you misplace your key, all of your Cryptocurrencies will be lost forever. Keep in mind!
- Getting fooled by frauds
Be vigilant of Crypto deals that look enticing at first. We’ve outlined four common Cryptocurrency scams to be aware of:
- Scams with cloud multipliers
Fraudsters occasionally contact victims through email or text with an “investment opportunity.” They claim to return double or triple the investment made in bitcoin to investors who deposit their money to a specific digital wallet.
Remember: Free money offerings should always be treated with caution.
Criminals may quickly inflate or deflate the price of exceptionally small or unknown coins, sending their value surging in some cases.
Criminals may hold a large amount of Cryptocurrency at any given moment (through pre-mining much of it before it is available to everyone).
When unsuspecting traders rush in to attempt to get a cut of the profits, the criminals wait for the price to rise before selling all of their coins, causing the price to fall.
They might inflate the price by marketing it on social media before selling it for more.
- Dangerous wallet software
Stick with well-known Crypto wallets.
Sketchy or unknown wallets found on Google Play or the App Store might use dodgy programming to steal your Crypto assets.
It’s impossible to distinguish what’s real and what’s not with so many Cryptocurrencies on the market.
Criminals can acquire your identity and, in some instances, your hard-earned money if you buy bogus coins.
Don’t take anyone’s word; perform your research on coins using as many sources as possible before purchasing them.
Cryptocurrency is a means of achieving financial independence, and the worldwide Crypto community is growing by the day. In 2021, the globe invested more than $30 billion in Cryptocurrency. On the other hand, Crypto is a high-risk, high-reward game with constant volatility.
It is crucial to educate yourself on the basics and stay up with developing trends to expand your investment. Crypto aspires to give investors autonomy over their money, but they should avoid investing based on hypes.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn’t represent any investment advice or WazirX’s official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.