For people who have never tried crypto investing, the whole thing seems too complicated, and in some cases, a bit risky. Since the crypto market is known for its high volatility, getting immersed in this new investment space and holding crypto assets should be taken seriously. Even the most seasoned investors have experienced some ups and downs in navigating the crypto sphere.
This isn’t to say that you should completely abandon the possibility of becoming the next crypto investor. Even if the crypto industry took years for the general public to acknowledge its innovation, it is now gaining greater traction, especially in financial markets. This shows the growth and influence of cryptocurrency in the financial world.
Here at Casino Days India, you will learn how to properly invest in crypto to prevent losing your savings in the blink of an eye. Continue reading below to learn more!
Getting started: How to invest in crypto
Contrary to popular belief, investing in crypto is not only for the tech-savvy. Even if you have no background in investments or digital coins, getting started is a walk in the park. For as long as you keep yourself updated with the market and the surge in prices, you’re prepared for anything related to cryptocurrency.
Take a look at these tips on how to invest in crypto:
Choose a cryptocurrency to invest in
Since there are more than 7,000 digital currencies in the market, choosing a crypto to invest in may seem like a lot of work. Fortunately, there are some fundamentals that you should keep in mind to keep you guided. Here are some of them:
When it comes to choosing a cryptocurrency, you need to study its underlying technology. As an investor, you should understand how developers incorporated technological innovations into the code for them to stand out among their competitors. Make sure that you keep yourself updated with the latest protocols and forks, among other things.
For instance, Ethereum utilizes smart contracts which are blockchain-based programs that allow the execution of an agreement without a middleman. Another advantage of using Ethereum is that it permits other developers to apply blockchain technology in their own applications called Decentralized Applications (dApps).
Before investing, observe a cryptocurrency’s following first. If they have ironclad communities and a loyal user base, then it must hold a lot of promise and display good performance in the market.
For starters, you can visit reputable online forums like Reddit to help you understand complicated crypto terms. You can visit YouTube channels as well to get a good grasp of the events within some of the biggest crypto communities.
One of the factors you need to consider when choosing a digital asset is their vision. Do some research about their long-term goals and how far they are willing to go to revolutionize various industries like finance, gaming and social media.
If they have no real goals to present, they will most likely fail in the market, which could put a serious strain on your savings if you invest in them.
Diversify your crypto portfolio
There’s a saying that goes, ‘don’t put all your eggs in one basket’. In crypto investing, the same rule applies. Just like with stocks and shares, you need to spread out your investments in various digital currencies.
This way, you can manage the risk and avoid losing your digital funds in case one of them experiences a decline in price. Keep in mind that cryptocurrencies are highly volatile, so tread carefully!
One example is Elon Musk’s influence on the prices of cryptocurrencies, especially for Bitcoin and Dogecoin. On May 13, 2021, Musk announced in a tweet that Tesla will no longer accept Bitcoin as a valid payment method due to increasing fuel emissions. Shortly after the announcement, Bitcoin’s price fell by more than 10%.
When you diversify your portfolio, the digital coins you’ve invested in that are performing well on the market would counterbalance your losses.
Remember, being proactive in investing helps your investments grow bigger over time! Track the market, carefully select your preferred crypto and make sound decisions when trading.
Learn to copy trade
If you’re unsure of your investment capabilities, copy trading can be one of your options. It is a type of investment trading that allows you to observe and copy the trades of a seasoned investor. This lets you save time in studying the ins and outs of the crypto market which can help you get on an easy start.
Coinmatics, eToro and 3Commas are some of the platforms that offer copy trading. All you have to do is choose your preferred trader and look at their overall risk score, performance and followers. Once done, connect your account to their movements and updates so when they trade their crypto holdings, your account copies it.
However, just because they’re already professional investors does not mean that they always have the right predictions. Make sure to set up a loss limit to stop your copy trading if your losses are already accumulating.
Be on the lookout for crypto scams
One of the biggest mistakes that novice traders make is they fall for crypto scams. In some cases, cybercriminals would trick you into believing that they could triple your investments if you send them to a particular digital wallet. Some fraudsters would also encourage you to invest in fake coins resulting in them stealing your private information and your funds.
To avoid crypto scams, always practice healthy scepticism. Investigate the potential investments offered in the market, especially the ones that are too good to be true. Most importantly, make sure that you enable two-factor authentication in your digital wallets for extra protection.
Moreover, if you receive an email claiming they’re from a cryptocurrency company, think twice before clicking on it. Verify if the email address is spelt correctly and read the content of the message carefully.