Cryptocurrency has been a topic of great discussion across the world in recent times. Stories abound of how first investors in the currency have become overnight dollar millionaires.
But you should not invest blindly in crypto. You need to actively seek information that will help you become an enlightened investor. This article will discuss eight essential tips you should keep in mind when undertaking your investment.
Ignore the pessimists
You may encounter many people in media and financial circles that cast doubts on crypto as a viable investment option. The truth is, most of them are making their projections from an ignorant or biased point of view. The hyped speculation is obviously intended to drive a specific biased agenda.
The fact that a growing population is increasingly embracing crypto for its financial prospects and application of crypto assets confirms one thing: crypto is here to stay, and it is the investment of the future. Experts project that crypto trading activities are set to increase by 50% in 2020. If you want to reap big, buy and hold what you believe. You will definitely prove the naysayers wrong.
Be ready for the unexpected
Cryptocurrency markets come with significant volatility worth taking note of. However, you should not be alarmed by the huge price swings that are hard to find in standard markets. It is crucial, therefore, to mentally prepare for these occasionally unfavorable market performances to enable you to act rationally rather than emotionally.
Experienced investors are used to this, and you may find them investing crazily during the bear moments because they are sure the prices will swing back.
Choose your exchange platform carefully
Not all cryptocurrency exchange platforms you read about on the internet offer everything they are advertising. There are more than 200 digital currency exchanges listed on CoinMarketCap, and choosing a specific one that meets your investment needs can be such a daunting task. You need to consider the location of the platform.
Determine whether it is available and legally operating in your country. Other factors to consider when looking for a suitable platform include its authenticity and reputation, customer support, security, fees and rates, and its usability. Such authentic platforms, such as Binaryx, which features Binaryx – The Best Cryptocurrency to Buy in 2020, can a good starting point when looking for a suitable crypto exchange platform.
Diversify your investments
It is not wise to place all your crypto coins in one basket. You should spread your risks by diversifying. When you are investing in stocks, financial advisors recommend that you invest in all types of stocks. It would help if you also did the same when you are investing in crypto coins.
Do your research and spread your investments to cover as many coins as possible. Aim at investing in multiple sectors that serve different use cases. If you want to benefit from significant future crypto gains, determine to diversify your portfolio.
Create an email account specifically for trading
You should create a specific email that is exclusive for trading. When you use the regular account to undertake your trading, your exposures to fraudental activities rise significantly. The email account you create should feature an added two-factor authentication password security.
All login activity should make use of the two-factor authentication to make your trading safe. You should also avoid using text messages for two-factor authentication. Instead, a two-factor application should only be used. Some secure two-factor applications include Google authenticator and Authy.
Besides, the account you set up should come with a unique user name and password that makes it hard for criminals to guess. Using the names or ages of your children or favorite pet as a password is not wise. The password and username should not feature any personally identifiable information that makes it easy for hackers to access your account.
Understand both hot and cold wallets
Typically, crypto can either be stored via an online hot wallet or an offline cold wallet. If you are a beginner investor, then go for hot wallets. It features ease of access to make it user-friendly for a beginner seeking to establish their footing in crypto trading. However, although they are more desirable to beginners, hot wallets are more prone to hacking than their cold wallets counterparts.
Alternatively, if your investment strategy is to save your crypto into the unforeseeable future, then you should save it in a cold wallet. You should then keep a small amount that you intend to use regularly in a hot wallet.
Besides, you should not confuse exchanges for wallets. Although it may seem convenient to keep your coins online, you won’t have much control of it in case something goes wrong unexpectedly. If exchanges go down or the platform gets hacked, it may be a challenge for you to mitigate the effects because you will not have much control.
You should take your time to research wallet providers that are secure and convenient.
Exercise caution around mobile wallets
It is very risky to store or trade large sums of crypto via a mobile phone. A mobile phone is more susceptible to being hacked physically or electronically. You should always put security above convenience when choosing the appropriate mobile wallets. Don’t risk your hard earn investments just because you want an easy and convenient wallet.
Conduct due diligence before investing
You should seek a lot of enlightenment before making any crypto investments. Avoid making investments if you lack an understanding of the underlying assets. Every coin comes with easy to access online whitepapers. These crypto whitepapers will help you gain an insight into promising digital coin investment options. Seek to understand how the coin operates and how it will make money for you. You should endeavor to always make decisions from an informed point of view.
You will gain a lot of valuable information from the eight tips we have discussed above. Hopefully, you will use the tips to make informed decisions that will make your investment actions safe and lucrative.