Those who bought Bitcoin at the beginning of 2018 are currently counting their losses because its value in the market has gone south. Investing in cryptocurrency is a business like any other and it comes with some risks. The good thing is that there are ways of avoiding such risks. Below are tips that can guide you when investing in cryptocurrency for the first time.
- Buy and Wait
Some people buy cryptocurrency with anticipation that they will become millionaires in an overnight. The truth is that cryptocurrency is not a get rich quick scheme. Money comes to those who can afford to wait. Although there are some investors who bought Bitcoin in the second quarter of 2017 and still made huge profits, such cases are very rare. This is because the market tends to fluctuate most of the time before moving upwards. You must therefore give the cryptocurrency you have invested in time to appreciate in value. If you sell your crypto after just a few days, you will only make peanuts. Those who made huge returns in 2017 are those who bought their cryptocurrency back in 2012.
- Invest in Different Cryptocurrencies
The world of cryptocurrency is very dynamic. When you buy any given cryptocurrency, there is no guarantee that its value will appreciate in the near future. Just in case you are not in the know, cryptocurrency is simply a game of probabilities. You can mitigate this risk by buying different cryptocurrencies. And since all cryptocurrencies don’t appreciate in value at the same time, you will still make money even when one of them depreciates. It’s like owning several cars. Even if one of them was involved in a terrible road accident, you still be able to go to work with either of the other cars that were not affected.
- Start Small
If you are just getting your feet wet in cryptocurrency, it’s always advisable you start with a small amount of money. Those who are wealthy can afford to start with lots of money because they are already financially stable. Remember, you can lose all the money you have spent on buying cryptocurrency. If you are still struggling to make ends meet, it’s recommended you start with a small amount of money that will not leave you devastated in case of a huge loss.
- Invest in Knowledge
There are many issues that drive the cryptocurrency market. Just like stocks, cryptocurrencies are influenced by politics and economic issues. Some issues have a positive impact while others have a negative effect on the market. Those who are in the know take advantage of such happenings to make a fortune. The easiest way of staying up dated in issues that affect the market is to participate in social forums such as Arcane Bear. When you join such forums, you will benefit from the insights that are shared by the most knowledgeable investors.
- Use an Online Wallet
Anyone who wants to invest in cryptocurrency must first open a mobile wallet. Without such a wallet, it would be impossible for an investor to fund his account. The account is also used when withdrawing the money. Even if your broker is registered, it’s advisable you transfer all your profit into the wallet because it’s much safer. A trading platform can be hacked and result into your cryptocurrencies being stolen.