Bitcoin, the first-ever cryptocurrency, still leads the pack after its 2009 debut.
Since Bitcoin came into being, there have been over 21,000 cryptocurrencies. So, there are plenty of options available for crypto investors.
While most crypto users are millennials, crypto investing appeals to other demographics. But you’ll want to avoid rookie mistakes to become a successful cryptocurrency investor.
Check out these seven beginner cryptocurrency investing mistakes to avoid.
1. Not Researching Before Investing
One of the worst things you can do is invest before researching. There are tens of thousands of cryptocurrencies you can invest in. But that’s not to say that they are worth sinking your money into.
You don’t have to stick to Bitcoin, Ethereum, and Tether. There are other reputable cryptocurrencies. Research the companies behind them before making any investments. Check out reputable sources like CoinDesk for info.
Don’t focus too much on little-known cryptocurrencies with insufficient track records. Otherwise, you could lose your proverbial shirt. Spread betting providers may offer educational resources and analysis tools to assist participants in their decision-making process.
2. Investing More Than You Should
Don’t get so caught up with buying and selling cryptocurrencies that you spend more than you can afford. Crypto is volatile and can rise and fall at a moment’s notice. It’s not for the faint of heart — so don’t bet the rent or grocery money.
It can be tempting to sink too much into crypto with the hopes of achieving substantial returns. But there are more stories about people losing their entire investments than becoming millionaires due to crypto investments.
If you can’t afford to lose whatever amount you want to invest in crypto, you can’t afford to make that investment. So, invest within your means. You’ll be less stressed out if you invest if you start off investing smaller amounts.
3. Putting All Your Money in Crypto
Have you heard the saying that you shouldn’t put all your eggs in one basket? It’s a mistake to sink all your money into cryptocurrency investing. You should also consider investing in stocks, mutual funds, bonds, and even real estate.
Crypto shouldn’t be viewed as a get-rich-quick investment opportunity.
Yes, there are cases where people have seen their fortunes soar because of investing in crypto. But there’s a lot of luck involved in speculative investments like crypto.
4. Failing to Secure Your Cryptocurrency
Did you know a record amount of crypto was stolen in 2022? In fact, hackers stole a whopping $3.8 billion from unsuspecting cryptocurrency owners. The last thing you want is to be careless about securing your investment.
Stick to a reputable crypto exchange platform, and get a good crypto wallet.
If you want to engage in cryptocurrency trading that’s safe, easy, and affordable, discover more on virgo.co. It’s good for beginners and experts.
But even if you invest cryptocurrency on reputable platforms, you still need to do your part. For instance, you need to use strong passwords and enable two-factor authentication for any cryptocurrency apps you have.
The last thing you want is hackers to gain unauthorized access to your account and steal your crypto investment profits.
5. Sending Crypto to the Wrong Address
Another horrendous mistake is accidentally sending crypto to an incorrect address. Remember that crypto transactions aren’t regulated the way other financial transactions are.
Crypto transactions are permanent. So, when you send crypto, it’s an irreversible transaction. Verify addresses before sending any crypto.
If you need to send a large sum to an address and don’t want to make a mistake, try doing this:
- Send a small amount to the address
- Wait to ensure it’s the right one
- Send the balance
Don’t find out the hard way that there is no return-to-sender option with crypto investment. It can leave a sour taste in your mouth.
6. Failing to Take Profits
Yet another mistake you need to avoid is failing to take profits. It can be fun to see your crypto holdings climb in value. But remember that cryptocurrencies are volatile. They can drop in value as fast as they skyrocket.
How do you take profits? One option to consider is removing your initial crypto investment after you’ve made some money from it. So, if your first investment is $5,000 and that amount grows to $7,500, withdraw $5,000.
By so doing, you’ll know that, even if volatility hits the market, you are still at least no worse off than when you started. You might choose to withdraw more profits periodically and invest those proceeds in other things.
7. Falling Victim to Your Emotions
Avoid the temptation of investing based on emotions. It’s easy to do so if you’re investing in stocks. Many stock owners will unload right away after negative company news or other things. But that’s rarely the right move.
Making moves based on emotions is simply a bad investment strategy. Some people invest due to the fear of missing out. But that’s investing based on speculation. That’s no way to treat your hard-earned money.
Avoid These Beginner Cryptocurrency Investing Mistakes
If you want to succeed as a crypto investor, you need to avoid falling into some of these common pitfalls. What starts out as a dream can become a nightmare if you’re not careful.
Weigh your options for cryptocurrencies to see if crypto investing is for you. You’re more likely to be successful if you research and avoid these common beginner cryptocurrency investing mistakes.
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James Martin is a passionate writer and the founder of OnTimeMagazines & EastLifePro. He loves to write principally about technology trends. He loves to share his opinion on what’s happening in tech around the world.