Cryptocurrency is one of the most popular trends in investing at the moment and it seems like everybody is trying to make money from it.
There are a lot of myths about investing in cryptocurrency and there are a lot of people that think it’s an easy way to make money.
While it’s true that you can make good money from it, it’s not the shortcut that people often think that it is. If you’re going to start putting your money into cryptocurrency, you need to follow these rules.
Using Scam Sites
The cryptocurrency boom brought about an opportunity for criminals to scam people out of their money and so many people have fallen prey to these scams.
When you buy or sell cryptocurrency online, always make sure that you’ve checked the site out properly first. Otherwise, you’ll send your money and not get anything back, or you’ll sell your cryptocurrency and not get paid for it.
Always do a search on the site to see whether anybody has posted anything about scams.
Don’t Sell Too Early
The reason that a lot of myths have emerged about cryptocurrency being an easy way to make huge sums of money is that the market fluctuates quite rapidly.
In fact, at one point Bitcoin increase in value by 75 percent in just a month. There were countless stories of people that had bought Bitcoin when it was relatively cheap and ended up making a substantial profit from a tiny initial investment. While those people might have gotten lucky, that doesn’t mean you will as well.
Those stories often mean that people will panic sell their cryptocurrency when the value jumps by a significant amount. But, just like any other investment, those regular fluctuations don’t always mirror the overall trends.
If you sell early because you think that you’re going to miss out on a big profit if you don’t, you could be doing yourself out of more money further down the line. Wait to see whether the price changes again before jumping the gun and selling.
Holding On Too Long
As well as selling early, people also hold on to investments too long, even when they’re losing money. Again, this is because of the false impression they have of cryptocurrency.
They think that, even if the value is dropping, there’s going to be a huge increase just around the corner that will make them rich. Chances are, that’s not going to happen and you’ll just end up losing more money. Cut your losses if the value starts to drop and stay low.
Take Delivery Immediately
When you’re buying cryptocurrency, you can store them in an online virtual wallet. However, it’s far safer to take delivery of them immediately and store them on a hardware wallet on your computer.
Recently, in India, authorities seized the assets of some cryptocurrency companies and forced them to exit the market. This meant that anybody that was storing their cryptocurrency with them could not access their money. It’s much better to keep it on a personal computer than to trust anybody else.
Cryptocurrency is a good investment option, but don’t fall into the trap of thinking that it’s easy money and always follow these simple rules.