Ready to start investing in cryptocurrency? It’s such an exciting investment opportunity to be a part of, with the chance to make a lot of money if you can hold your nerve and wait for the right time to sell.
Getting in at this stage also means that you can benefit from the experiences of the early adopters – including the mistakes that others have made so you don’t have to!
Buying any old coin, just because it’s cheap
There are so many options beyond bitcoin, and the savvy crypto investor will weigh up the pros and cons of different currencies before making a choice. What you shouldn’t do is just buy whatever coin is cheap to purchase on the day that you go to invest. Many of the super-cheap coins end up with no value at all and never recover.
Instead: look at the historic performance of the coins that you’re considering, and take tips from experienced investors.
Giving in to FOMO
In the world of investment, fear of missing out (FOMO), refers to jumping onto a particular investment because it’s making other people money. The problem is that by the time you experience FOMO, you’ve probably already missed the opportunity. This means that you’ll end up buying high and making smaller profits (or potentially even experiencing a crash).
Instead: stick to your investment strategy, even if you see others doing well elsewhere. If you do feel the need to switch to a different opportunity, make sure there’s still room for growth.
When you see the value of your investment falling, you may get a natural urge to sell-sell-sell – a voice in your head telling you to get out before the price dips any further. But in a market that’s known for its wild swings, panic selling could see you missing out on a big opportunity and losing out as a result.
Instead: Stick to your plan, hold if you can and make sure you only invest money that you can afford to lose (so that the dips cause you less worry).
Investing in just one coin
Diversification is a very important investment strategy. It means investing in several different things, so that if one crashes you can still fall back on the others. It also allows you to pick up investments that have more risk, as you know that you have a back up plan. If you only invest in one type of cryptocurrency then you’re leaving yourself open to the whims of the market.
Instead: Invest in several coins. It really is as simple as that. You can put part of your investment money into a stable coin with a good track record, while also investing in other more exciting currencies.
Going in without a plan
Without a plan, you leave yourself open to all of the mistakes that we’ve discussed above. You’re more likely to panic and jump over to another investment at the wrong time, and you’re more likely to sell when you should be holding.
Instead: Have a clear exit strategy, which means knowing when you want to sell. You should also consider what type of investor you want to be.
If simply buying and waiting doesn’t sound all that appealing, then you might be better suited to trading, which involves buying and selling over the short term to profit from changes in the market. Traders also require a strategy, and there’s software out there that can help. The 1k daily profit website is a great example of software that will help traders understand the market and make good trading decisions.