Everybody is talking about crypto these days. Many want to get their hands on the lucrative digital currency. The dramatic rise of bitcoin is a good case in point. The original cryptocurrency was first introduced in 2009 for $0. Today, it is valued at $39,762.50.
I was watching a YouTube video about bitcoin on my Spectrum TV the other day. I was too much in it that once my TV connection was making trouble and I contact customer service by dialing Spectrum phone number and besides the TV connection I asked that guy that have you invested in crypt? Although that’s not that funny but at that moment I laughed a lot. It contained some fascinating facts about virtual currency. One of them was that people are investing blindly in virtual currencies since they see it as a rewarding investment.
However, there are several things to consider before investing in cryptocurrency:
Do Your Research
You will find plenty of self-proclaimed crypto wizards and digital currency experts these days. People are starting to jump on the crypto bandwagon. Many claim to have the secret formula to becoming a crypto millionaire. Similarly, social media platforms like WhatsApp and Telegram are flooded with groups and channels on cryptocurrencies.
Take the word of these so-called crypto financial advisers with a grain of salt. Many of these people aren’t even licensed financial advisers. They are con artists who gain at the expense of others. Chances are you’ll end up losing money instead of making it if you fall for the hype. It is advisable to conduct some research before investing in crypto.
Read articles on virtual currencies. Check the legal status of crypto with your local state authorities. Watch YouTube videos to gain important insights about virtual coins. It is advisable to approach tech-related investments like bitcoin with caution. Yes, you will come across crypto success stories but there is always more to tech than meets the eye.
Never Invest Everything in Anything
That’s the basic rule of investment. Many people invest more than they could afford to lose. This is a big mistake. Consider investing money you’re comfortable with losing. That means that do not invest huge sums without a backup plan. Remember, not everyone gets the reward on their first try.
Of course, there’s beginner’s luck but the crypto market is not your average trading. For starters, it is extremely volatile. A simple tweet could cause the crypto value to collapse. If you are thinking that how is that even possible then I’d suggest you Google Elon Musk and crypto. The two have a love-hate relationship.
Musk is known for his erratic behavior. His tweets often cause Tesla shares to fall.
While trends and charts can help you understand the market, a real learning experience will come with trading live. Investors are in panic mode when they have real money on the line in a turbulent market. Think of live trading as a learning experience. Never invest 100% of your money on volatile trades like crypto.
Explore Different Investment Avenues
Yes, crypto is being touted as the “currency of the future”. Many countries are considering adopting it as a legal tender. Businesses are hoping to accept digital coins soon. More, there are crypto success stories with unbelievable results. However, even that does not paint the full picture of crypto.
If you find some success with your crypto investment, withdraw your earnings and invest them in a more stable trade. Never invest 100% of your earnings in any business or trade. We’ve already talked about that. Don’t think that withdrawing your earnings will limit your investment. Well-disciplined investors create a diverse investment portfolio. The strategy is to pull out and reinvest.
Never Fall for the Hype
Sure, crypto enjoys strong support from fans and celebrities alike. The hype is big with virtual currencies. High-profile celebrity endorsements and aggressive PR campaigns are creating blind faith in coins. Investors are pulling out everything they have to cash in on the opportunity. People fear that they might miss out on “this opportunity of a lifetime”.
Do not fall for the hype created by these crypto cults. There is a lack of consensus when it comes to what is fact and what is fiction in the world of crypto. Moreover, a lot of PR campaigns are not organic. They are backed by massive funding. So, it is better to use common sense than become a blind follower when it comes to such decisions.