Cryptocurrencies represent the money of the future, and there are many people trading, buying, and mining e-money. With Bitcoin leading, virtual currencies market capitalization reached as high as 237.1 billion USD in 2019, which is more than a 90% increase compared to the year before. With those high numbers involved, it’s no surprise to see many people investing in virtual money and trying to be the next Jered Kenna who bought bitcoins for just 0.2 $ and sold it for 258 $. Today, his estimated net worth is around 30 million. Someone interested in investing in e-money is always reading the stories about young millionaires, but there is another side, much darker side.
There are also lots of those who lost their savings in trading crypto, so before investing your money, it would be wise to learn from the experiences of others and do research. These are some of the usual and often made mistakes for beginners in this business, and it would be smart to avoid them.
Not enough research
As a new investor in cryptocurrencies, it would be best to learn the basics of virtual currencies and how to work with them. It will take a little bit of your time, but better than losing money. Lots of people like to consult experts like the-wealthmatrix.com where it’s possible to find out about market tendencies, and where to invest. Besides that, you can get quite helpful software about trading strategy and market researches, analyses, and predictions.
Check your sources
One of the first mistakes is trading and buying driven by emotions, and not by common sense and research. Follow only verified sources and advice. Do not get carried away full of excitement while reading some social media clickbait articles full of titles like “Bitcoin is collapsing, it is time to sell” and don’t trust free shared insider tips and reports. Nothing can replace good, adequate, and professional analysis, and no one got a fortune quickly.
Know and stay within the budget
Handling with virtual currencies is a risky business, and it is quite hard to know what future can bring, so don’t try to risk an amount which you can’t afford to lose, and especially do not take a loan for this purpose. Even the most experienced traders suffer financial loss, so it is significant to be able to handle that loss and not get into debt.
Bounce back or not?
Some traders like to search for virtual money whose value rapidly fell in the near past. There are so many examples of coins that reached its peak, and then failed and never recovered. Take Aurora, for example. So don’t expect to guess some huge value increase when buying a low valued, or crashed coin. There are always some exceptions, but very rare.
Never forget to check the security
Use only secured wallets to avoid hacker attacks and losing your e-money. In the past, some services even stopped working, and hundreds of millions are lost and maybe even billions. Whenever there is money, someone will always try to take it away, and the same goes for wallets containing virtual currencies. Always use only your personal computer, data encryption, and two-step verification, and never forget to make at least one backup physical copy of your data. Also, write down your passwords on a few secure places, and, of course, don’t lose or forget those.
Never rush into buying and selling
Many people sell way early, while the value is still increasing, and they do it in fear of losing money. That’s the easiest way to miss some great opportunities to earn even more. Similar to this is the fear of missing out, when some people buy coins, without any particular reason, and only because they are afraid that everyone else will get rich, and not them. This way of crypto trading is highly risky and not productive at all.
Don’t jump into anything
Before investing in any particular virtual coin, follow the charts. The virtual currencies market is a really fast one, and a week in the crypto market is like months on the stock exchange. Besides your money, invest your time if you want to make a profit. Follow the market, and if you don’t find anything suitable, skip it, and gain experience.
Don’t put all your money on one horse
When investing in crypto, which is a risky market, never get stuck on one particular coin. Although everyone knows BTC is the safest way for crypto trading, it’s not wrong to try to invest in some other virtual currency from time to time. It can actually turn out quite profitable.
Try not to choose the wrong exchange
When exchanging virtual currencies, many newbies don’t read all the terms of the exchange. The best advice is to compare as many of them as possible, and after careful research, use the safe one that has an acceptable fee. Even some of the most popular exchanges have a high fee, which will reduce profit, which is the main goal in this business. Always check this before exchanging, so you could avoid this common mistake.
Plan in advance
The last, but probably the most important, always have a plan. When you are failing to have a plan, you already plan to fail. After you finish analyzing the market by yourself, or by listening experts, it is time to make a plan. Define your budget, secure your wallet and your password, define your strategy, and arm yourself with a lot of patience, but don’t become greedy because it’s much harder to keep money than to earn it. Create your own rules, and follow those rules to succeed in crypto World.
When investing in cryptocurrencies, it is hard to avoid mistakes, and even the best sometimes makes them. Trying to make money in the crypto world is very difficult, and it is even more difficult if you don’t learn from your mistakes. Some of those are easily avoidable, but some are tricky, and that is the difference between earning and going broke.