If you have been constantly hearing about cryptocurrency and have been secretly wanting to invest in it but still have no idea where, to begin with, then you have stumbled upon the correct article.
It does not take long before you either completely mess up your investment or you become a hugely successful investor in a dynamic market as the Altcoin market.
Cryptocurrency investment has been getting a lot of hype for the past couple of years. The growth of Cryptocurrencies in the normal world of finances and markets have been visible through the acceptance of bitcoins in many big companies.
This radical change in how we handle money and how we make payments is what has grabbed the attention of many investors at present. Thus it is very much important that you as a potential and interested Cryptocurrency investor must learn about the Cryptocurrency market. Below are some of the tips for new crypto investors to follow:
Cryptocurrency Investment Tips
- Start Small
Most of the investors do not understand that you do not simply get richer if you invest a large sum of money at an investment. The cryptocurrency market is one of the most dynamic markets at present. There is a high probability that the market will collapse if the faith of the people goes down.
Thus it is suggested that you invest only part of your savings, only the part which you can afford to lose. Even though Bitcoin market looks relatively positive, the extreme volatility shows that there is a 50-50 chance of you losing your cryptocurrency investment.
It is adviced that you start at a maximum of only 10% of your saving. This way you can play around with our money get to know the market and also not be devastated by the loss if any.
Diversification is vital if you do not want to take the risk. If you use all of your funds to back a single coin, you will put yourself at risk since the single currency may face failure and with it, your investment may go down.
Thus to clear yourself of this kind of unfortunate event as far as possible try to invest the same fund in as many kinds of coins as possible. Even if a single coin fails in the market, you will have other coins to back up your investment.
Since Bitcoin has already established huge reputation and stability in the market, it is advised that you use your funds in similar kind of coins which are relatively safer and older.
- Find a reliable exchange
A trading platform is very important to keep track of the security of your transaction. If you are putting your huge funds at stake, you might as well put it in the hands of someone worth trusting. Take a look at the reputation of the exchange thus a thorough review is necessary.
You should also look at the transaction fee that the exchange platform charges since you want to pay only a small amount as commission. This way you will be saving enough in the long run. It is vital that you compare the exchange rates of different exchange sites.
You should also look for the payment methods and the verification process of the site for privacy and security purposes. Also, these exchanges must support the country you live in.
- Choose the right currency
There are a variety of cryptocurrencies in the market at present. However, not all cryptocurrencies are the same. The new currencies tend to be much riskier. It is vital that you invest your hard earned money in something that is safer and reliable if you are a beginner.
You must identify the right kind of coin for you. For this, you will have to check if the cryptocurrency you wish to invest in is used to pay for things or not. You must look at the significance of the coin in the real world so that you can use it.
- Market Study
You must properly understand the cryptomarket before you ish to invest your funds in it. It is vital to predict the market for any future changes and look at the past trends so that you can take advantages out of the predictions.
Time and experience are needed to make these predictions, but since a new investor does not have both of them, it is vital that they look at the reviews.
To identify the patterns from the historical behavior of the coins, you can take a look at the articles regarding these currencies in various sites. An individual and comparative analysis are necessary if you want to invest in a coin.
There are numerous exchange sites which help you to practice making a bold cryptocurrency investment by creating a practice account. Her you can invest fictional money and track their success over the time to come.
This allows you to understand the trend of the crypto market. You must also expect some loss at all the times and try your best to make predictions to attain profit as far as possible.
There are many real-life cases where many users have fallen trap in some losses that are worth keeping into account.
When Mt. Gox the largest exchanges collapsed overnight in 2014, more than 850000 bitcoins stored in the system was lost forever. The coins were valued at $450 million. The company filed for bankruptcy, and till date, this incident is regarded as the biggest exchange failure.
This makes you understand that you cannot simply trust any company only because of its name. The dynamic market of Cryptocurrency is bound to bring anything down any time.
You must be fully prepared for such an event comes unannounced. For that, you will have to understand that putting your entire fund in a single exchange is a bad idea.
Having to use different platforms and keeping numerous accounts might be annoying, but it will ultimately be a safety net when unforeseen incidents like the one mentioned above take place.
Also, it is suggested that once in a while, you should cash some of your cryptocurrencies. You can simply exchange the crypto for fiat currency and stash it in your bank account or use it in times of need.
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- Do not go with the hype
There are people in the crypto community who want to make a quick buck by using deceptive methods. They simply do this when they hype a coin on exchange chat rooms and forums to cause a rise in price simply to sell at a higher profit.
Since the market runs on trust and belief, many users are likely to follow this hype since most are clueless about it. Thus it is recommended that you follow your judgment when it comes to buying and selling and use objective information through research.
- Do not get overwhelmed
In a volatile market as such, it is very easy for an amateur investor o freak out initially. Even though you follow all advice and you do your research, it is very easy to make mistakes and lose money. Do not over-invest in any coin.
When you invest relatively less in any coin, there may be 50-50 chance that you may lose the cryptocurrency investment or it may be profitable. So if you have invested less then, you don’t need to freak out during times of loss since it is not life altering.
Do not panic simply because the pace of earning a profit is slow or if you are losing money. Take baby steps and increase your knowledge with time and experience. The main thing is to keep calm and carry on with the trading.
Keep all the advice in mind and do your research to make predictions. This is the only way you can succeed in the dynamic environment of the crypto market.
Best Cryptocurrency Exchanges
Coinbase - Good for beginners.
BitMEX - Leading crypto trading platform.
Bittrex - High-quality exchange with a lot of coins.
Kraken - Best for worldwide exchange.
Poloniex - One of the biggest cryptocurrency exchanges.
Coinmama - Fast coin delivery.
Bitpanda - European broker.
Changelly - Swap coins securely.
Cryptopia - Exchange for small & cheap coins.