Whether it’s out of love and admiration or apprehension and disbelief, cryptocurrency has become a force to reckon with, in an unbelievably short period of time, as Bitcoin (BTC) was launched as the first modern cryptocurrency back in 2009.
Today, more than 700 cryptocurrencies exist in the market, whereby top 100 of them boast of a market cap of over $24 billion, with Bitcoin claiming over $16 billion. It’s not without a reason that cryptocurrency has become one of the most traded commodities at many online brokerages.
There’s so much it offers that conventional forms of investments lack. For example, it’s not regulated by any centralized governing body, you can trade it relatively anonymously and only you are the owner of your crypto-wealth, unlike a bank or any other financial institution capable of seizing your assets at their will.
It’s reasons like these that make investing in cryptocurrency so appealing to people. However, with high probability of earning some fast growing profits, there’s also a slight risk of putting your hard earned investments on stake if you are new to cryptocurrency investments. So, let’s have a look at critical mistakes to avoid when investing in cryptocurrency for the first time.
Chewing more than what you can swallow
As with everything else, don’t chew more than what you can swallow. Undoubtedly, cryptocurrency investment has been quite rewarding since past few years, with price of 1 BTC going above the price of 1 ounce of gold recently. This can be way too luring for novices to throw in everything they have in the name of investing in cryptocurrency, exposing themselves to a potentially risky outcome in worst case scenarios. One of the best way-outs here could be not placing all your eggs in one basket, i.e. don’t invest everything in one cryptocurrency. There are always some reliable new cryptocurrencies to invest in, such as Goldime, Abundeum and Hedgenickel.
Not taking leverage of ‘Take Profit’ and ‘Stop Loss’ approach
Investing in cryptocurrency is perhaps one of the best examples of ‘high risk high reward’ phenomenon. When you are a newcomer ready to invest in environments as volatile as that of cryptocurrency investment, ‘Take Profit’ and ‘Stop Loss’ approach is your best safeguard against this kind of high unpredictability. This approach ensures that you safely encash your profits right before the price of an asset peaks and withdraw your stakes before it sinks to the lowest.
Not putting your analytical shoes on
It’s quite simple, if you are not ready to have your hands stained while playing a grease-monkey, you are not going to make it. So, make sure you put your analytical shoes on before you start investing in cryptocurrency. Sure, playing with numbers and feeling comfortable reading and understanding complex charts and diagrams is not everybody’s cup of tea, but there’s still a lot you can do by thoroughly researching into all areas of cryptocurrency.
The better you are able to befriend chart readings and market price fluctuations, the better you are going to make as a successful cryptocurrency investor.