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The crypto market is extremely volatile and thrives on speculation. This is simply because it’s a very new crypto investment tool and people are still experimenting with their money.
Still, there’s no denying that some crypto traders have become millionaires, thanks to their sound investments. However, there is no fool-proof method of investing in crypto. What has worked for one may not work for the other.
So, what’s the best way to keep your crypto investments safe?
To help minimise your risks, the expert team at Coinswitch has put together a list of the 5 obvious and not-so-obvious mistakes that you should avoid while crypto investment.
Not Having a Plan
Never invest in crypto just because everyone around you is doing so. Just like any other investment, crypto investment also need a sound strategy. You should have a financial foundation and a strong one at that. This will ensure that you can withstand any sudden risks or potential losses that may come with crypto investment.
To make sure that you have funds to fall back on, we advise creating an emergency or a retirement fund and paying all your credit card debts.
Not Doing Your Research
Researching about crypto is essential before you part with any of your hard-earned money. It’s best not to rely on what others tell you. Spend some time doing research of your own. Find the currency’s whitepaper. It is a publicly available document that will tell you about the project’s mission, how it works, and the coin’s sustainability. Twitter, news articles, and Reddit are good places to get information about currencies.
Another thing to find out is who has developed the currency and if it has a publicly listed board of directors. Are any known companies using it? All these are great indicators of how well-established the currency is. If you want to invest in an established currency like Ethereum, check its conversion rate and price (Ethereum price INR).
Trading on an Unsafe Crypto Exchange
A failure to trade on a reliable exchange may spell huge losses for you. This exchange is a key in crypto trading. This platform allows you to buy and sell crypto and trade them for altcoins or other assets. No one exchange will fulfil all your requirements. Instead, choose one that aligns with your Crypto Investment goals.
Read on the exchange’s security policy to know how it plans to protect its investors from fraud or hacking attempts. These may include two-factor authentication and other security provisions. Some exchanges have insurance policies to safeguard their investor’s money.
Not Knowing When to Trade
One of the most common investing mistakes is buying a particular coin when its market share has recently increased. You should know that such quick jumps don’t usually last in the crypto world. They fluctuate enormously and are extremely price sensitive.
You should also never buy a coin when it’s too cheap. Though it’s understandable that not everyone has huge monies to invest in, never make the mistake of putting your money in less promising coins that may turn out to be a risky proposition later on. You can rely on credible platforms such as Coinswitch to know when to trade. For instance, if you want to invest in Ripple,
Not Diversifying Your Portfolio
Investing in just one type of crypto is a risky proposition that invites losses in the long run. Always spread your investments in more than two coins. Your Crypto Investment must be a cohesive blend of some stable and large coins along with those that are medium-sized. You can also add in some small-cap coins such as Ripple. Make sure you know its price and conversion rates (Ripple price INR) before investing.
In the crypto world, things change pretty fast. It is easy to get swept away by all the hype. But with these guidelines, you can be assured of creating a safer and better Crypto Investment strategy for yourself.
