It has become easier to invest in cryptocurrencies ever than before. Wise investors are putting their money into buying cryptocurrencies. It is wise to buy/exchange cryptocurrency, but if you are new to this, avoid making these mistakes:
The hype boat:
Falling for the hype is another mistake that most beginners make. Even those who are mediocre in crypto trading also usually make this move. A new cryptocurrency supported by a billionaire (you know who I’m talking about) doesn’t mean it’s going to be a permanent hit. There are hundreds and thousands of coins in the retail markets with no value.
A coin backed by influential people convinces newbie investors to buy these coins in the hope that they might hit a home run one day. However, a sudden rise in coin trading doesn’t guarantee a boom in the near future. Likewise, if something is trending on social media, it doesn’t mean that it will succeed in the long run. So before jumping in the hype boat, make sure you do your technical analysis, read expert blogs online, and take expert opinions before buying a coin.
Wrong wallet address fiasco:
This is a mistake that most beginners make in the cryptocurrency business. Giving the wrong address can cost you everything. An incorrect address can lead you to send cryptocurrency to a whole new person. This simple mistake can end up you losing a lot. Hence, it is vital to double-check your wallet address before sharing it with anyone.
Crypto millionaire mindset:
Most people have this mindset that investing in cryptocurrency will make them overnight millionaires. Though there have been cases where people became overnight millionaires, it’s not entirely true. Most investors buy low trading coins hoping that one day the currency might make them overnight millionaires. You might get a chance, but let us get real; the possibilities are mere minimal. If you’ve heard the story of someone who bought many Bitcoins when it was launched, and now they’re multi-millionaires, it doesn’t mean you are going to be one too. I’m not demotivating you, but a reality check is also crucial same as a motivational push.
No basic knowledge of cryptocurrency:
Let’s get real here. Do you even understand cryptocurrencies, or you’re just buying because of the trend? What is blockchain? What are cryptocurrencies? If you can’t answer these basics questions and still want to invest your money, that’s probably a bad idea. It is better to learn to swim before you dive right into the ocean. Hence, educate yourself before investing in crypto. If you don’t do that, you will find yourself out of the game before you even start.
Easily fall for crypto scams:
Again, if you’re educated about a particular technology, you won’t fall for scams. Since crypto is trending and everyone wants to wash their hands from the goldmine, crypto scams are all over the internet. It’s 2021, and the scams nowadays look legit and convincing, which a naive person won’t be able to tell. Most deceptions are laid for the new investors who put their money without researching first. In order to save yourself from any blunder, do your research on that particular website online before opening an account and buying cryptocurrencies from it. And, if you own coins, think through before exchanging coins for currency.
Patience is the key:
If you are a new crypto investor, patience is the most crucial trait you must have before diving right in. It is something you need when investing in cryptocurrencies. The patience is for both buying and selling the coin. If you have bought a coin (after analysis and expert advice) and for some reason, the charts hit low on that coin, don’t rush in selling the coin right away, instead wait for it to get stable, and then make a calculated decision.
The most convincing example one can give is of Bitcoin. Before rising, bitcoin was below US $10K, but investors rushed into buying the coin after its rise to more than $64K. However, the recent downfall of bitcoin under $30K made many people sell it like hotcakes. Many have lost half of their investment already. A wise investor wouldn’t do this. Instead, they are holding the coin for the time when it gets back that high, especially those who bought it at $64K. If you are keeping track of Bitcoin, you must think hundred times before selling it.
If you are a new investor, don’t be impatient in selling or buying it. Instead, take calculated decisions after technical analysis, expert advice, and look at the charts before you plan on selling them.
Investing without technical analysis:
Most investors make the mistake of investing in cryptocurrencies without technical analysis that is REQUIRED for better results. So before investing in buying a coin:
- Make sure you have taken expert opinion and done technical analysis.
- Take a look at the charts to get more insights.
- Make sure you’ve read several blog posts on that particular coin before you buy it.
Don’t put everything in one bucket:
Don’t put all your money in one coin. If you are interested in buying a cryptocurrency, don’t buy just one coin; instead, buy several coins after you’ve done the required analysis. Read expert opinion as aforementioned. Putting a bet on different coins will limit the loss percentage.
Future trading is not for newbies:
Crypto Futures Trading is not for newbies. If you are a starter in crypto trading, don’t invest in futures trading. In futures trading, there’s a contract that specifies a particular date for selling the coin. A contract is made that bounds you to sell or buy coins at a specific date in the future. Crypto spot trading is more suitable for new traders than crypto futures trading.