Thinking of investing in cryptocurrency? While you can make a lot of money out of crypto, educating yourself and having the right strategy is essential. Fail to do this and you could lose more money than you gain. Below are six golden tips for investing in cryptocurrency.
Do your personal research
Before making any investment, it’s important to do one’s research. Don’t buy a load of Bitcoin just because a friend told you that now is a good time to invest. Study the charts yourself to get a good idea of where the value of different cryptocurrencies are going and how they have fluctuated over time. It’s worth also researching terms like ‘blockchain’, ‘mining’ and ‘fiat currencies’ before you start getting involved in crypto. You don’t have to become a certified expert before you invest, however it pays to have a fair amount of understanding before you start buying.
Practice with small amounts
Before investing a huge amount of money, it can sometimes be beneficial to practice for a month or two with small amounts of crypto. This could allow you to make a few rookie mistakes without the risk of losing too much money. Some exchanges allow you to invest with only a few dollars making them a great place to start – just be wary of the exchange fees that you may have to pay. Once you feel confident, you can then start investing larger amounts.
Buy in the right places
There are a multitude of different exchanges out there, each with their own perks. Some can be better suited to different cryptocurrencies – for instance, if you want to find out where to buy ripple from, you could find that certain exchanges offer better prices on this coin. Make sure to only use trusted exchanges that you know are going to be secure. You can also use brokers, but these tend to be more expensive.
Diversify your portfolio
Just like other investments, it’s never a wise idea to put all your eggs in one basket. Investing in multiple cryptocurrencies ensures that your money won’t all be lost if one currency suddenly decides to plummet in value. It’s less likely that all cryptocurrencies will plummet at once.
Work out your goals
Are you looking to make money fast or are you in it for the long run? While it’s a lot more risky, you can make money out of crypto quickly by being bullish and jumping on currencies that are rapidly on the rise. There are also currencies which have proven themselves to consistently rise in value, making them better and more secure long term investments. You could even try a bit of both.
Watch out for scams
Unfortunately, the crypto world isn’t short of scams. Many newbies can be easily lured into scams promising free coins and huge returns. By using secure exchanges, setting up a secure email address, installing security software on your devices and knowing when something seems too good to be true, you can avoid falling trap to scammers and cybercriminals.