Investing in cryptocurrency is one of many options for investing your money today. In fact, it’s quite difficult not to hear about the crypto market and its capabilities. However, all this noise does not mean that it is the safest way to invest your money; this is just an option.
Last week, I was completely stunned by the reaction of a friend when I simply asked: “How much money do you have in your bitcoin wallet?” He suddenly looked contemptuous. What happened He replied: “This is a long story. I heard brilliant reviews about how cryptocurrencies turned many into millionaires in one night, so I thought it would be wise to invest everything I had on November 27, 2017. You never know, I was throwing debts like a long-awaited party. I don’t think that one day I can again invest my hard-earned money in cryptocurrencies. ”
In fact, I felt sorry for him. But the main question is, did he do his homework before putting all his money? No, he is not. He just heard the positive testimonies of people and jumped into them. In the end, the cryptocurrency market is very volatile. This is not a safe type of low risk investment. Therefore, do not let FOMO force you to make a quick and risky decision, like my friend. But if you are considering this, here are more reasonable ways to invest and still make the most of it.
(Note: I'm not going to dissuade you from investing in cryptocurrency. I just want you to know about the high risk associated with the ability to invest as a businessman, and not as a gambler.) Read our section “Guides”
1. Do an in-depth study before investing in any cryptocurrency.
In order to profit from your investment in cryptocurrencies, you need to deeply examine the obvious coins. Thus, you will be more aware of the coins you want to invest in, and understand how useful they are in the crypto world. One of the main reasons that so many still doubt cryptocurrencies is that they suffered serious losses as a result of the sharp decline in the number of bitcoins and altcoins in December 2017.
As with my friend, thanks to FOMO, he entered the market without proper research and faced a huge debt. In this form of investing, just like in forex and stocks, you do not need to gamble to make a profit, so be careful with any decisions you make because the worst thing you can do is invest in cryptocurrencies who you know little or nothing about.
2. Do not invest based on hype and noise.
A smart cryptocurrency investor does not make decisions based on hype and noise – this is very risky. If you want to make money by investing in crypto, you will have to invest based on calculated risks and asking the right people for the right guidance. Relying only on what the crowd says about coins is not at all wise. The price can drop suddenly, resulting in a terrible loss.
Instead, be enlightened, ask the right people for guidance, and arm yourself with enough knowledge before investing. Making money with cryptocurrencies is not child's play. You need patience and the right knowledge to make a decent profit.
3. Understand your risk power and invest what you are willing to lose.
Taking financial risks makes some people nervous, while others take the moment and take advantage of the opportunity. Where do you belong? Be sincere with your answer here. This will help you decide which part of the portfolio to invest in.
It is advisable if the risk makes you nervous, do not invest in crypto. There are many other investment opportunities that are not very volatile. However, if you take a chance, invest only the part that you are prepared to lose if things go south.
Most importantly, there are no rules regarding investments in the same amount. If Yang invested $ 4000, this does not mean that you should do the same. If you are willing to take risks more than Yang, this is your decision, and if you want to take risks less, this is also your choice. The important thing is that you invest within your limit. This is what you are willing to lose.
4. Distribution of your money on more than one coin.
A good risk mitigation strategy is to spread your investments across cryptocurrencies. It has its own difficulties, but it is better than investing in only one coin. Yes, cryptocurrencies are extremely volatile in their prices, but they all fail at the same time - an unlikely event.
Besides bitcoin, there are thousands of others on the market. You just have to open your eyes because there are also many scam coins. Among the "real" coins, study and select those that have potential, and then allocate your money according to the calculated risk. The idea behind this - and any of these tips - is to reduce the risk of losing all your money. Good luck.