Have you ever seen Bitcoin or another cryptocurrency take off and gotten sweaty with FOMO? Towel off and take a breath. And maybe a shower — we can still smell the fear on you.
1. All time high
One of the biggest mistakes you can make as an investor is to invest when it’s high — or at an all time high
That’s what happened to people earlier this year when they bought in as Bitcoin was running from 30k to 66k. When the price came back down and started moving sideways, those who had bought at the high then panic-sold or are now deep underwater. (Scuba is a perfectly acceptable way to hide from your creditors.)
The cryptocurrency market is very volatile and can drop significantly in a very short period of time — We’ve seen the market fall 50% within just a few days.
When it comes to timing your investment, be strategic on how you are going to get that money into the market while minimizing the amount of risk that you’re taking.
Many seasoned investors like to use a DCA (dollar-cost averaging) strategy to reduce their risk. They choose the same day each month or each week to purchase a certain amount of a cryptocurrency. If the market is significantly down, they may increase this amount slightly or if the market is up, decrease it. Emphasis on “slightly” — not like you how you told the police officer you only “slightly” ran that red light.
2. Not Researching Before You Invest Before you invest in a cryptocurrency, make sure you do your own research (DYOR) about that company. Read the whitepaper. See if there is any actual news about them on CoinDesk or another reputable source.
One crypto mistake people make is investing in a cryptocurrency based on the hype, the trend, and because their best friend’s brother’s uncle told them to buy a coin. That one is for sure going to the moon! (The moon being where Jeff Bezos takes his worthless cryptocurrencies.)
There is definitely a strategy when it comes to investing, and it’s super important to have a system when analyzing cryptocurrencies so you don’t invest in something that is a pump and dump or a rug pull
3. Investing More Than You Can Afford
When it’s a bull market and returns are fast and furious, it’s tempting to throw all your money into cryptocurrency. But, remember, this market is relatively new and highly volatile. Just like Fast and Furious.
We always hear the stories of that person who turned $1000 into over $100,000, but they never talk about the thousands of people that lost a lot of money putting their last dime into the market. Or the tens of people who can no longer afford a third or fourth Tesla.
4. Not Securing Your Investments Properly
When it comes to investing in cryptocurrency, one of the most important things to keep in mind is security.
Reputable exchanges like Binance, Coinbase, Kraken, Crypto, and others, but it’s not recommended to use these as your crypto wallet. Instead, use a proper wallet, like a Trezor or Ledger.
5. Thinking Encryption Means Security
Yes, you read it correctly. Cryptocurrencies are encrypted, however, that is just to make them classified, and that does not mean they cannot be hacked or taken. These resources are decentralized, so protecting them is your sole liability.
6. Not Paying Attention to The Math
Investment is all about making profit potential. As it has been extended that there will be an ascent in bitcoin in 2021, you want to keep your focus on the big picture. Furthermore, how would you do that? Focusing on the numbers will tell you if you are creating again.
You need to check transaction fees. Also, as cryptocurrencies can be exceptionally unstable there will be numerous progressions in the cost in a day or even in 60 minutes. In this way, you want to see exchange charges assuming you need to exploit these changes.
7. FOMO
FOMO or Fear of Missing Out means buying on the promotion since you simply need to pursue the direction. All things considered, this is the most perilous one since you would probably here now gone again later plans or tricks.
FUD represents Fear, Uncertainty, and Doubt. As clear as it sounds, FUD might keep you from putting resources into crypto regardless of whether the examination details or market feelings are in support of yourself and advise you to contribute.
8. Comparing Low Rates as A “Take Deal”
There is no possibility of conceding that humans are endorsers of the “sale” mindset. That is the thing that commits this crypto. In the crypto market, costs are generally down, which is as they should be. Thus, you should do a careful examination into why a coin is valued low before putting resources into it.
Thanks for Reading i hope you like it please give it a up vote to appreciate work.
Your post was upvoted and resteemed on @crypto.defrag
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit