Countless people are thinking of investing in crypto for the first time. It’s no surprise, either. Now that the global market cap for cryptocurrency is $858 billion, new investors have plenty of opportunities to start and make money.
If you’re an aspiring crypto investor, there are some critical things you need to learn before you start. Below are five tips that will help someone new who is investing in crypto.
1. Learn the Tech
You have a different set of considerations when investing in crypto. There are many types of cryptocurrency, each with different technology and use cases behind them. It’s not the same as investing in a company’s stock.
Be sure to learn more about the technology behind each cryptocurrency. When you do, it’s easier to understand why something is worth putting your money into. You’ll waste less on risky bets that have no merit.
2. Find a Safe Platform
While a couple of traditional investing applications let you buy crypto now, your options are very limited. You may be able to purchase Bitcoin, but you won’t be able to examine the numerous alternatives. That’s a lot of lost value when you miss an up-and-coming cryptocurrency.
A safe trading platform is critical if you want to see success as a trader. Find the highest-rated exchanges and stick with them unless they don’t have a cryptocurrency you want to take a chance on.
3. Prepare for Volatility
One of the most significant issues a new cryptocurrency investor will face is volatility. They’ll purchase something they believe is safe, only to see it drop in value soon after they buy.
This is to be expected with cryptocurrency. Be sure you prepare for volatility to avoid making rash decisions that will cause you to cement your losses. In many cases, you’ll recover if you wait long enough.
4. Use Private Wallets
If you plan to buy and hold cryptocurrency, it’s not always a good idea to hold your coins on a cryptocurrency exchange. Even if one has an excellent reputation, there’s always the chance of something terrible happening.
Your coins are at risk if this happens. Move coins you don’t plan to use to a private wallet to avoid issues when a centralized exchange has problems.
5. Learn to Exit
Having an exit strategy is a big mistake many people make. They ride their investments to the bottom instead of taking a profit occasionally.
Create a plan to take profits and spend your current holdings. One option is a Bitcoin ATM, where you can withdraw your Bitcoin for cash.
Do Your Research Before Becoming a Crypto Investor
Crypto investment is a risk you don’t want to take without research. The assets are highly volatile, so making a mistake and losing your investment in a risky bet is easy.
But you can take steps to safeguard yourself when investing in cryptocurrency. Remember the guide above when you become a crypto investor to stay safe when taking the leap.
Check out the blog if you want more financial advice that will help you manage your wealth.