If you’re starting out on cryptocurrency, you must have a lot of questions that need answers. There is a lot of information online which can be overwhelming for a beginner. You’ve tried keeping up with latest cryptocurrency news but you still can’t wrap your head around the investment. If you’re experiencing such a situation, you’re likely not alone it is totally understandable to inquisitive. In this guide, we’ve highlighted some of the tips that can come in handy if you’re a beginner or a seasoned investor in cryptocurrency. There is always something to learn with this form of investment.
Don’t Listen to the Noise
You’ve probably heard about naysayers and the media terming cryptocurrency as a fad that will not last long. This is far from the truth as there has been a growing population that is steadily embracing cryptocurrency not only for investment purposes but for also for functional financial applications. The noise levels will most likely increase given the fact that cryptocurrency is growing. For you to be a successful cryptocurrency investor, you need to ignore the noise.
Prepared For the Unexpected
It would be self-defeating not to acknowledge the volatility that exists in cryptocurrency trading. There are huge price swings with cryptocurrency and an experienced investor will not be carried away easily. You stand a chance to gain a lot and also lose everything if you’re not careful. You need to be mentally prepared for the swings so that you’re not caught off guard when it happens. You’re expected to make decisions rationally rather than using emotions whenever there are massive price fluctuations.
Avoid Bad Investment Strategies
It is common for beginners to join what one would term as “pump and dump” groups. There are some gurus that will promise quick gains if you follow their trading strategy but there is always a catch. You have to pay to get access to their system or buy their unreasonably priced E-Book that has all the secrets to cryptocurrency. There is always a winner and a loser for every trade and you could find yourself consistently on either side depending on the investment strategies and decisions that you make. It is important that you first learn about cryptocurrency before you dip both your feet into the water.
Carry Out Due Diligence
We live in an age where information is easily accessible. There is no reason why you shouldn’t be carrying out research before you make an investment on an asset. There is a whitepaper that you can find online for every coin asset. The same way you depend on GPS to get you to a new place, you also need the coin’s blueprint before making an important investment decision. It wouldn’t be wise to pursue the investment opportunity if you are not aware of how the coin operates, and most importantly, how you can make money from it.
Don’t Place All Your Coins In One Basket
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This applies to any kind of investments and cryptocurrency is no exception. You need to diversify given the volatility of the coin market. This will mean doing your research on the different coins available in the market and going for the ones with the potential for investment opportunities. Having a diversified portfolio will come in handy for the rainy days as it is not always you’re getting to have it smooth when it comes to cryptocurrency.
Make Sure You’re Careful When Using Mobile Wallets
It is a big risk trading and storing cryptocurrency on your mobile wallet. A mobile phone can be compromised physically or electronically and you stand a chance to lose all your coins. Even if it is convenient, security should be the key priority.
Understanding the Use of Cold and Hot Wallets
You can store cryptocurrency via an offline “cold” wallet or online “ hot” wallet. As a beginner, you’re likely to find hot wallets desirable because of the ease of access. As much as hot wallets are convenient, they’re also susceptible to hackers which is a real threat in cryptocurrency trading. It will be impossible to hack cold wallets if they’re secured properly.
One of the big mistakes new investors make is confusing exchanges for wallets. Make it a habit to research the different wallet providers before deciding to use their services. You should start using a mobile wallet if you’re not aware of its security features.
You should never stop learning when it comes to cryptocurrency. Have an RSS feed of the latest news in the industry so that you’re well informed at all times.