Business

8 tips every cryptocurrency investor must know

bitcoin

If you are keen to dabble in crypto assets it is better to test the waters first before diving into the deep end of the crypto pool. Questions like whether you are already a tad late in joining the crypto bandwagon, or has the Bitcoin bubble already burst, are likely to be on your mind. At the same time, you cannot help notice the sudden surge in Bitcoin prices particularly during the lockdown brought on by the coronavirus pandemic. Here are some tips that will stand you in good stead if you are keen to start investing in cryptocurrencies:

  1. Disregard the critics: While there are many who will be arguing that cryptocurrencies are only a fad and over-hyped, the truth is that there is a growing number of people and businesses who have started embracing cryptocurrencies in their operations. This mainstream adoption of Bitcoins is on the rise and personal investors are keener more than ever to invest in crypto assets.
  2. Prepare for the worst: In the crypto space that is marked by high volatility in prices, you must expect the unexpected. The rules governing regular financial markets will not work in the crypto market. Experienced investors are used to the sudden price swings and to get your feet wet, you must be prepared to do the same.
  3. Do your research: You must never start making investments without understanding the nitty-gritty of it. Whatever the coin you are interested in, you can access its whitepapers online and educate yourself. The whitepapers will provide you with an insight into the potential of crypto assets. However, if you cannot get to know much about a coin and whether it has the power to make money, it is best to choose some other investment.
  4. Avoid poor strategies: Beginners often fall prey to pump-and-dump schemes. For instance, some so-called experts or social media communities start to make big claims about a certain coin. This prompts newcomers to make substantial investments in these. This leads to prices coming down soon after and they end up making losses. So, you need a robust investment strategy before you begin investing.
  5. Diversify your crypto portfolio: It is a mistake to put all your eggs in one basket; one that is commonly made by first-timers. Just as in financial markets where your advisors will ask you to invest in multiple assets to mitigate risks, similarly, in the crypto world too, you must spread your money across multiple crypto assets. Do your research well and invest in many coins. It is worth trying out the bitcoin circuit trading robot that executes the trade with lightning speed.
  6. Understand security risks: Crypto coins can be stored in different kinds of wallets, cold and hot. The latter are online wallets and susceptible to hacking and thefts. Cold storage is recommended for bigger sums while a hot wallet can be used when you wish to store a smaller amount.
  7. Avoid storing on exchanges: Beginners often make the blunder of storing their coins on an exchange. This may appear convenient but exchanges have been hacked before, like the infamous Mt. Gox incident where investors lost out heavily. So, take time to research wallet services and choose one that is highly rated. It is best to avoid mobile wallet storage as this is risky and data can be compromised easily.

Know taxation rules: This will vary from country to county; for instance, the crypto assets in the US are subject to long-term or short-term capital gains taxes.

Related posts
Business

More Banks Are Accepting Bitcoin and Trend Will Keep on Strengthening

Business

The Benefits of Using Online Training Software For Small Businesses

Business

2006 Honda Civic Battery Size and Price Guide

Business

How to Get the Best Work from Your Staff