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Six (6) Important Tips to Start Investing in Cryptocurrency
Guest Author May 18, 2022 12:32 PM

The craze around cryptocurrency has increased over the years.  Due to how fast it has changed the financial status of some people, it has developed quite the appeal to it. Undeniably, investing in cryptocurrency is one of the most lucrative investments one can make presently. According to recent trends, most people have benefited immensely from the lucrativeness of crypto — ranging from getting paid in crypto for work done, to making long-term investments and benefiting from the value growth, to short-term trading after proper research and consultation. 

However, to enjoy great reward, one has to endure great risk. The volatility that accompanies investment in cryptocurrency is one that requires thorough care to be exercised before investing in it. 

Also, quite a number of people don’t know how to go about investing in crypto. They hear about it, but they don’t know how to start, what transaction or what principles to follow when investing in cryptocurrency.

6 Important Crypto Investment Tips

This article gives an insightful exposition on tips that would guide your cryptocurrency investment journey. 

  1. Engage in Research

Like every regular business investment, it is important that you engage in research before putting your money into any crypto-related investment. You need to be sure that the coin you are investing in is a stable coin that is not that volatile and one that possesses the tenacity to withstand generally bad market patches. In carrying out your research, you have to put certain factors into consideration, such as: 

  • A whitepaper that shows the aims and objectives of the creators of that particular coin
  • Leadership and the community involved in the promotion of the coin
  • Its historical performance in the market
  • Whether it is a good time to buy. With regard to long-term investment on coins already considered stable, it is generally better to “buy the dip,” that is when the prices are down. This will increase your profit margin upon the rise of the coin.

Coins like Bitcoin, Ethereum, Solana and Dogecoin have proven to be stable coins that are worthy of putting your money. There are other cryptocurrencies that you can discover by research.

  1. Choose a Reputable Exchange Platform

You have to choose the appropriate platform to facilitate your crypto transactions. Platforms like Binance, Coinbase, Kraken, and eToro amongst others, have been rated as the choice platforms for cryptocurrency transactions. These platforms allow you to set up your wallet and trade your currencies. They are like the marketplace for cryptocurrency. 

After setting up your exchange, open an account to enable your trade. This process involves supplying your biodata, I.D card, photographs and proof of address.

As soon as verification is obtained, the world of investment possibilities in cryptocurrency lies ahead. 

  1. Be Strategic with your Investment

 The popular ideology with regards to investments is to not view them as ‘get rich quick’ schemes. When cryptocurrency is approached like other investments, there is a tendency to be more strategic in the amount put into it by an average investor, to avoid concentrating all assets in one portfolio. 

The rule is that you should not invest more than you can afford to lose because cryptocurrency is quite volatile. Because of this volatility, huge sums can vanish into thin air. While stable coins usually regain their value, funds needed for projects would be unavailable.  Another reason is that it prevents panic sales. If you invest an amount you can let go off, a minor dip would not trigger a panic that causes you to sell. Instead, it will be easier to be patient enough for the coin you’ve invested in to recover in the market.  

  1. Diversify your Portfolio 

The popular saying that “you don’t put all your eggs in one basket” also applies to cryptocurrency. When investing in crypto, ensure that you spread your investment across different viable coins. The reason for this is that crypto can be very unpredictable because it would be difficult to lose on all fronts.

  1. Getting Paid in Cryptocurrency for Gigs 

It is important to note that you do not always have to immediately put fresh money into cryptocurrency. If you are a freelancer, this might be easier for you. There are freelance platforms that allow you to get crypto jobs and earn cryptocurrency. The money earned from a gig can form the first capital for your investment. Most early investors in cryptocurrency started out by investing money made from normal freelancing work. Now, it’s even easier as cryptocurrency can be earned while working as a freelancer. 

  1. Know When to Cut Losses 

This tip is especially for those involved in trading or who have invested in not so popular coins. Invest with a mindset that not all crypto assets will give you maximum returns. When you discover that you are losing a lot more than you intend to allow, walk away. The way to go about this is by setting a cap on my losses and selling off to reduce the deficit if losses exceed that cap.

Bottom Line

The tips shared in this article will at the very least give you an easier introduction into investing in cryptocurrency. Paying attention to the volatility of the crypto market is a good trait you need as an investor as it would help shape your perspective on the intricacies of crypto trading. 

Your crypto deserves the best security. Get a Ledger hardware wallet for just $79!

About the Author

Guest Author View all posts by Guest Author

This is a guest author and not a team member at Coinfomania.com. Hence, views and opinions in the article are strictly theirs.

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