Are you planning to hop onto the cryptocurrency bandwagon? If so, you need to follow certain tried-and-tested strategies that are likely to bring in profits for your investments. Questions like, “has the Bitcoin bubble already burst”, or “are you already too late in getting started in crypto investments”, are bound to bother you. But the truth is that cryptocurrencies are here to stay as the ongoing pandemic has shown us quite clearly, with Bitcoin prices hovering around $30,000 at the close of 2020. So, follow these handy tips to start investing in crypto coins:
- Disregard the criticism: You will come across critics and naysayers that insist that cryptocurrencies are only a sham and completely over-hyped. You need to keep yourself away from such negativity if you are to invest in digital assets.
- Adopt a reliable trading strategy: Most beginners make the big mistake of falling for faulty strategies and become victims of the pump-and-dump schemes. Certain groups on social media start making tall claims about the prospects of a certain digital asset, prompting people to invest in it. This leads to prices coming down as more and more investors choose to put their money in that asset. Eventually, the holders of such assets are forced to sell them off at low prices. Why not try bitcoin rush handel and experience an uninterrupted swift trading?
- Prepare for the unexpected: The crypto market does not conform to regular financial rules and prices swing dramatically because they are influenced by market sentiments. There is marked volatility that one should never ignore when investing in crypto coins. So, when you plan on investing in cryptocurrencies, you have to be prepared for sudden, undesirable outcomes. You cannot let your emotions get the better of you.
- Research: You cannot expect to reap profits without knowing how the system works and what the blockchain technology is all about. Almost every cryptocurrency out there has downloadable white papers that you can access readily online to update yourself. So, to be a smart and savvy investor, you should make an effort to educate yourself.
- Invest only as much as you can afford to lose: You should never put in money that you cannot afford to let go; the crypto market behaves erratically and you can never predict a definite outcome. It is best to spread your money across multiple assets and own a diversified portfolio. This will help to mitigate your risks as losses in one asset will be offset by gains made in another.
- Understand cons of hot and cold wallets: You can store your assets in “cold” or offline wallets and “hot” or online wallets. Each has its advantages and drawbacks. Hot wallets may be convenient but they are prone to hacks and thefts as they are online. Col wallets are safer for storage if you plan to hold onto a lot of coins for a long time. You must never keep coins on an exchange because these can get hacked as what happened in the Mt. Gox incident.
- Trading CFDs: When you are a beginner and afraid to own digital assets, you can easily trade CFDs that is far convenient and lets you open short-term trades. With CFDs it is possible to trade on margins and avoid big losses. These are offered by brokers but their trading terms can vary.
- Be wary of mobile wallets: Storing a lot of crypto money on mobile phones is risky. These can be compromised and damaged physically and electronically. So, while convenient, be careful when storing crypto assets on phones.