Cryptocurrency is an essential topic of discussion among the tech-investors. There are many updated crypto news available online, updating investors about the crypto market. The cryptocurrency market is extremely volatile. Some investors can be a millionaire overnight, while others who are looking for a quick buck can go to a massive loss in a single day. Almost every cryptocurrency that exists today in the market sees volatility in its price. You cannot expect that a particular cryptocurrency will make you rich overnight. If you avoid some simple mistakes while investing in cryptocurrencies, you can make quick bucks in no time.
How To Trade In Cryptocurrency
Investing in cryptocurrencies is much similar to investing in any stock from any exchange like NYSE. You can buy and sell cryptocurrency from some of the most popular cryptocurrency exchange centres like Coinbase, Bitpanda, Kraken, etc. These are the most trusted crypto exchange platforms available today. New investors can create their accounts on these exchange platform and get started with cryptocurrency trading.
Things To Avoid While Investing In Cryptocurrencies
1 Try To Avoid Cryptocurrency Bubble
This one is the most crucial advice for starters who are looking to invest in any cryptocurrency. Most of them are just a bubble that will burst someday. The crypto market is driven by several people who do not have much experience with blockchain technology.
Moreover, cryptocurrency is itself an upcoming trend and cannot be considered a stable investment. It is better to go with a popular cryptocurrency like Bitcoin, which has a market capitalization of more than $130 billion. Other options can be Ethereum, Litecoin, BTC, etc. as these cryptocurrencies are also performing well. If someone is interested in investing besides these, they can still put a small amount.
2 Don’t Go For A Single Cryptocurrency
Most of the new investors go for a single cryptocurrency and put all their money, hoping to make a quick buck. It is essential to diversify your portfolio and include other cryptocurrencies. The cryptocurrency market is extremely volatile. You cannot, however, expect that a particular cryptocurrency will make you a millionaire overnight. Although Bitcoin is the most popular cryptocurrency, its price can also go down someday. So it is essential not to put all eggs in a single basket.
3 Avoid Any Risky Cryptocurrency Exchange
It is a quick way to lose money, and most traders that fall victim to this one are beginners. Investment requires some basic knowledge about cryptocurrency and how they work. There are many risky cryptocurrency exchange platforms available online, looking to attract new investors through their Ponzi schemes. They may come up with mouth-watering offers, and appear to provide better services than cryptocurrency exchanges operating today.
Although Mt. Gox and Bitfinex are very popular, they have also become a victim of some high-profile hacks, resulting in cryptocurrency loss worth a million of dollars. One most trusted exchange is Coinbase, which has never hacked. Investors can rely on blockchain analysis reports and news, that provide updates about the cryptocurrency market. Still, you can take some risks with a small amount of money and go for the new cryptocurrency exchange market.
4 Don’t Go Emotional While Selling Your Cryptocurrencies
The investor must not sell their digital currencies based on emotions. If the asset value of their digital currency falls, they should not sell their cryptocurrencies, at once. Before making any decision, investors must evaluate the situation and can sell a fraction from their digital assets. Their price may go up after a certain period. It is better to hold your cryptocurrencies if their fundamentals remain intact.
5 Never Fall Prey Of ‘FOMO’
Finally, you should not become a victim of ‘FOMO,’ also called ‘Fear Of Missing Out.’ The cryptocurrency market can go up and down quickly. A particular cryptocurrency may see a low trading activity, which can result in price fluctuations. If a digital currency is growing, investors may purchase it, hoping that it will not fall in price, and they fear to miss out. Every cryptocurrency, whether it is popular or not, will go up and down in price. For example, Bitcoin has also gone down, regardless of its popularity and market capitalization. Investors should hold the cryptocurrencies they are owing, and never hope that a particular one will keep rising.
Conclusion
So far, we have seen some crucial mistakes to avoid while investing in cryptocurrencies. New cryptocurrency exchange platforms can fool the crypto investors with their Ponzi schemes, which appears to be a good deal, but they can take all your funds. You should not allow any new cryptocurrency exchange to access your Bitcoin wallet , in case you are going for Bitcoin. Also, investors should not put all the funds in a particular cryptocurrency. Such investments have always lead to financial loss. Finally, we can say that investors can take a little risk with new cryptocurrencies coming into the market and can start with less amount in the beginning.
Author Bio
Hi, I am Sujit. I am a passionate blogger and crypto admirer. I work for Cryptoknowmics, which is known for the best Cryptocurrency Arbitrage Trading and ethereum airdrop . I like to find and share new information across the web. You can follow me on Twitter and Linkedin too.