Invest for the long haul
The volatility of Bitcoin makes its prices rise and fall in dramatic fashion from day to day, urging novice traders to sell when prices are low. For example, those who bought BTCUSD in late 2017 and sold before October 2020 would have suffered a loss.
When investing in cryptocurrencies, those who practice patience and play the long game will come out on top when it’s all said and done. Digital wallets aren’t going anywhere, anytime soon, so leave your money in the market as long as possible to get the biggest returns.
2. Don’t put all your eggs in one basket
It’s important to diversify your crypto portfolio as much as possible like you would with stocks and shares. The top coins include Bitcoin, Ethereum, Binance Coin, Tether, and Solana.
Spreading your money among different cryptocurrencias means you limit the risk of over-exposure if one digital currency plummets in value. Make sure to do your research before you purchase a new cryptocurrency.
3. Automate purchase process
Most cryptocurrency exchanges allow users to set up recurring buys as they would with stocks and shares. Essentially, an automated purchase process is when investors tell the platform to buy a certain amount of a cryptocurrency each month.
Even though investors will get less of the currency when prices are high, they’ll make up for it by getting more when prices are low. Automating this process takes the stress out of trying to time the market, which is something that even the best professionals struggle with.
4. How to manage risk with Bitcoin
Avoid crypto tips from people who promise you will get rich quickly with little investment. Setting limits on investments is the best way to avoid losing money you don’t have.
Cryptocurrency trading is a high-risk venture where traders lose more often than not. A good mentality to have is that crypto-trading is as volatile as gambling, you never really know if you’ll win or lose, so never spend more money than what you can afford to go without.
5. Create a Crypto strategy
Crypto scams are a dime a dozen nowadays, growing to 7,118 in the first nine months of 2021 – up 30% on the entirety of 2020 – with the average loss at nearly $28,000 per victim. Make sure to always do your research on new coins you invest in, asking yourself critical questions to see if the investment is too good to be true.
Ask yourself if the coin has any links with the industry, if it solves a problem, and how many active users it has. Some new cryptocoins promise earnings upwards of what the industry leaders provide, so avoid those who make promises they can’t keep.
