Introduction
Cryptocurrency investing can be an exciting opportunity for a new income stream, however, it's also associated with risk and complexity that should be considered and assessed carefully. The chance for big returns attracts many people, but the market's ups and downs can be tough to handle.
The reality of crypto lies in its volatility. But still, success is possible if you have a clear and well-informed plan on how to do so. To help you get started in crypto investing and make smart choices along the way, in this guide, we have listed down straightforward tips that you can apply to win in the digital industry.
Most Recommended Strategies for Wise Crypto Investments
To guide you as you start your journey in the world of cryptocurrency investing, here are clear and practical tips to help you make informed choices. These strategies aim to simplify the process and enhance your ways of making firm decisions.
Only invest what you can afford to lose
This is like the golden rule in the world of cryptocurrency and it speaks a lot about the overall market. As mentioned, the crypto market is highly volatile, you may earn profits today or may lose most of it tomorrow. No one can really tell, thus, it's a must to only risk what you can accept to lose any day.
Depending on your preference, this could also mean that it should be a small part of your overall investments, ideally no more than 5%. Don't make impulsive decisions and make sure you have enough savings for emergencies before putting any money into crypto.
Buy regularly regardless of the price
The thing about investing is that you will never know if you will win if you don't take a risk. Thus, instead of trying to guess the best time to buy, choose to do so if you have the chance, but still use methods that are wise such as dollar-cost averaging. This method involves where you invest a small amount of money in a regular cycle, like every week or month.
By mastering this technique, you will be able to buy more when prices are low and less when prices are high. In return, you can expect something significant if there are no movements, thus buying regularly and being wise at the same time is essential to see results.
Opt for well-known cryptocurrency
There are numerous types of cryptocurrencies. When you're a beginner, you will surely get overwhelmed. Although newer cryptos have the potential to get big in the market in the long run, investing in established cryptocurrencies like Bitcoin and Ethereum is generally safer and secure. These cryptos have been around longer and have a track record of being more stable in the market if you compare it with the smaller coins.
Again, it's not to underestimate newer coins in the market, you can still invest in them, but be cautious and do your research so you can really assess its potential. Regardless, don't put all your money into them. Monitor your performance in being involved in crypto investing for a few months before you give it all.
Do your research
You just can't depend on what other people say or what the trends are, because of course, you will usually just encounter the positive side of cryptos through it. What you should definitely do is continuous research to gain an in-depth knowledge about both its negative and positive side. This way you will be able to manage your expectations. To start, you might want to read this article on how much should you invest in cryptocurrency.
Thus, before investing in a cryptocurrency, learn about it. This includes checking its real-world uses, how fast and secure it is, and who is behind it. Aside from general research, also do individual checks if a certain crypto has more advantages over other cryptocurrencies. Lastly, don't get involved with investments that seem too good to be true or are over hyped.
Keep your crypto safe
Aside from being knowledgeable about the market, you should also prioritize keeping your cryptos safe and protected from potential fraud and scam - which is technically rampant in the crypto space, another downside. To store your cryptocurrency in a secure place, always choose to use a hardware wallet or a trusted service to keep your coins safe.
Additionally, avoid storing large amounts of cryptos on exchanges as these are more prone to get hacked. Make sure your recovery phrase, the information you will use to restore your wallet in case of instances that could happen, is kept in a secure location where it is private and protected. It's also recommended to keep the recovery phrase to yourself.
Conclusion
Knowing what to do and setting a clear plan before engaging with crypto investments are two most important things to achieve success in the digital space. Always set the rules when to buy, sell, and hold and don't let your emotions predict your decisions regardless of whatever the previous outcome may be. Lastly, it's also important to review your strategy regularly and make adjustments if needed to make sure that you're keeping up with the pace of market trends that greatly impact crypto investments.
