For over a decade, we’ve witnessed astronomical growth of cryptocurrency with new opportunities for investors. It’s the volatility of cryptocurrency that makes it a lucrative investment. However, this volatility makes it one of the riskiest investments. Therefore, before we look at what you need to do before investing in crypto, one cardinal rule of investment is never to invest in what you don’t understand, just to paraphrase the legendary investor Warren Buffet’s adage advice to investors. Before you invest in crypto, ensure you take care of the following factors:
- Do proper research: Research is a must if you want to succeed as a crypto investor. The crypto industry could just be a decade old, but there are loads of information you need to know before you venture into its trade. Read blogs and articles on crypto investment. You can also learn from experience investors sharing their knowledge and experience on social media platforms such as Telegram.
- Do it yourself: avoid the idea of investing in crypto through someone else. Using people to trade with your money is one of the fastest ways to lose money. To get started, take advantage of the demo accounts provided by most exchanges to help you learn a thing or two. You can also deposit a small amount of money and play around with it as you learn how to trade.
- Diversify with different cryptocurrencies: Although BTC is the most popular cryptocurrency, many altcoins can give you better returns if you follow the correct investment rule. Learn more about ETH, XRP, Tether, Litecoin, ADA, etc.
- Invest safely: The safety of your digital asset is the most important factor to consider when investing in cryptocurrency. Let no one lie to you that you can’t get scammed or that no one can steal your digital assets. There are all sorts of scams, hacks phishing attacks, and fraudsters. To be safer, take all the precautionary measures, including protecting your passwords (private keys) and confirm that you’re using the correct URL.
Investing in crypto is becoming mainstream as more people are getting into it every day. With the massive opportunities, you need to consider some basic rules in ensuring you succeed in crypto investment. Other than ensuring the safety of your digital assets, learning how to invest and doing it yourself is one of the most important criteria to consider when you invest. Also, learn to diversify with various crypto assets to spread the risks.