You may have already heard the buzz about cryptocurrency, but what the heck are they? How do you invest in cryptocurrency? Are they actually worth investing in? Here’s your guide to everything you need to know about cryptocurrency and how to start investing today!
How to Invest in Cryptocurrency
What You Need to Know Before Buying. Crypto-investing can be intimidating if you’re new to cryptocurrency or even if you’ve been into crypto for a while, but it doesn’t have to be. In fact, some of most successful and well-known crypto investors took time getting familiar with their options before investing. We rounded up five of our favorite tips for investing in cryptocurrency below.
This list is by no means comprehensive (there are literally hundreds of strategies out there), but as you research these concepts and learn about different coins, consider these rules as a baseline for your investment strategy. First Things First: Have a Strategy Understanding your goals is just as important as understanding how cryptocurrencies work in general.
5 Tips Every Cryptocurrency Investor Must Know:
1) Invest only what you can afford to lose
You are taking a risk every time you invest, whether it’s with cryptocurrency or not. If you invest only what you can afford to lose, you’ll have peace of mind if things don’t work out as planned. If your investment value grows beyond what you can afford to lose, think long and hard about what that means for your short- and long-term goals before moving forward.
Although it may be tempting to keep investing with cryptocurrency when times are good—especially if one coin seems poised for greatness—make sure not to get too caught up in day-to-day price fluctuations; never put off making important financial decisions because of temporary panic or fear.
Never let fear drive your investment choices! Sure, we all want our investments to do well so we can build wealth over time; but we also need to consider how different investments might affect our other priorities over a given period of time (such as retirement savings). At some point along your journey to financial freedom, you’re going to need plenty of courage (with no chance of failure) to make big moves toward fulfilling major life goals.
2) Don’t invest in cryptocurrency more than you can afford to lose
Investing isn’t a game of chance and you should never invest more than you can afford to lose. Most investors will lose money at some point, even if they’re really smart and really careful. Cryptocurrencies are risky, too. No one knows what will happen with cryptocurrencies—the value could go up overnight, or it could drop over time.
Nobody really knows which cryptocurrency is going to take off first and become widely used (if any). Because of all these factors, investing in cryptocurrencies is not for everyone. But that doesn’t mean that you shouldn’t learn about them and that you shouldn’t invest a little bit of money just so you know how things work.
3) Don’t invest with any money you need in the near future
In cryptocurrency, if you don’t have money to invest, get some. If you need it in a month, that doesn’t mean you should wait a month before investing. In fact, it’s likely to be worth much more as time goes on. Remember: crypto is volatile; investing only when you can afford to take high risks is a good idea. Invest only what you won’t need for at least five years. Don’t touch it until then; do something else with your money instead (like donate to your favorite charity). Wait until there are clear signs of recovery before you put any more money into crypto investments.
Consider selling once prices start rising again — but don’t forget about TA: This advice works well enough in regular markets, but things become even more complicated when you add technical analysis (TA) and strong convictions. If a person believes his new cryptocurrency will moon soon, he might hold off cashing out because he knows it will go up tomorrow.
The price could drop suddenly and he could lose all his money while waiting for confirmation from his chart analysis (and getting hurt by FOMO too!). Get advice from people who know cryptocurrency: Again, TA and strong conviction makes things confusing here as well. Chances are a friend who owns Bitcoin has also invested in other cryptocurrencies — not telling him that new ICO looks like an obvious scam would feel like betrayal!
4) Don’t be greedy – invest only what you can afford to risk losing
Most of us have grown up believing that investing is something you do if you have money to spare and want to see it grow. The reality, however, is very different. Investing well and making money isn’t about having a ton of cash on hand but knowing how much of it you can afford to lose. If your portfolio takes a hit, don’t be afraid of losing some money; view it as an opportunity instead. Make sure that when you invest in cryptocurrency you do so with only what you can afford to risk losing; treat every investment as an experiment and learn from your mistakes.
After all, investing is risky but that doesn’t mean we shouldn’t take chances! Never invest in anything without doing your research: Here are two golden rules for investing:
Rule #1: Don’t invest in anything without doing your research.
Rule #2: Don’t ever forget rule number 1!
5) Be smart and take your time!
If you decide to invest in cryptocurrency, you need to be smart and take your time. If you jump into investing with no plan or strategy, chances are high that you’ll lose all of your money fast. Crypto is an exciting field filled with plenty of opportunity for everyone who wants to make money! But just like any other form of investing, it’s important that you do your research so that you know what’s going on and how things work.
Do not jump into investing without learning about it first; if nothing else, learn about Bitcoin by reading our detailed guide . It might seem complicated at first, but a few hours spent learning will pay off big-time down the road. And once you figure out how it works?