“Crypto” – short for cryptocurrency – is one of the hottest things to take the tech world by storm right now. Chances are that almost everyone you know is in, or knows about crypto trading. It’s a new-age gold rush where anyone can see success while sitting at home. Like the actual gold rush, though, it has its fair share of dangers. Scammers, bots, even “miners”, will try to pull a fast one on you if you’re not careful. However, that shouldn’t stop you from trying your hand, with proper planning and insight (and a little bit of luck) crypto trading can be a very lucrative gig. So here are five tips you should know before investing in crypto:
Don’t follow the hype train (avoid speculation investing)
Although the twinkling lure of an Elon Musk tweet might seem like a good reason to pour your life savings into Bitcoin (or even Dogecoin), it won’t always work out in the way you hoped.
Given its unregulated nature, many more factors can affect a cryptocurrency’s value than a regular currency like the Dollar or Euro. These are often fixated on by people trying to create hype for certain cryptos so that its price suddenly spikes and makes it seem like it’s “going to the moon”. As you jump on board, hoping to make a quick buck, these speculators are already cashing in and just as quickly sending the price plummeting again. They walk away loaded and you’re left in the red. Be wary of following the masses and try to avoid other people’s speculation. Instead…
Do your own research
There is a plethora of information about everything crypto available right at your fingertips; thousands of online tutorials on how to set up your e-Wallet and thousands more on blockchain structures, investing safely, which coins to buy when, what a ‘coin’ even is. If you want to know something, Google it. If you don’t know where to start, Google it. crypto exists online so that’s the best place to learn about it. Take all the information you learn and put it together to form your unique style of investing and think critically about it. Not all information is correct. Take everything with a pinch of salt until you get more validated information about it. The only ‘right’ way to invest is one that makes you money at the end of the day.
Bitcoin isn’t the only cryptocurrency…
Some advice for when you’re starting out: Bitcoin isn’t the only cryptocurrency. Just like the Dollar isn’t the only currency. Sure, everyone knows about it and it’s the main one everyone seems to talk about, but it’s not the only one you can buy. There are plenty of other pretty stable coins out there just waiting to be properly invested in so don’t put all your eggs in one basket.
But there are dodgy projects out there
It’s also a bad idea to go investing in every “promising” coin you find – especially as you start investing/earning more. In one quick search, you can find tales of people collectively losing millions worth of crypto because the company they trusted with their life savings decided to pull a fast one. You’re better off sticking to the top ten or twenty most popular coins because those at least have a solid following and (generally) a lot of safety measures in place to protect you if anything were to happen.
Join in the community conversation to stay updated
Like regular currency, crypto is driven by people, and people decide whether the price goes up or down or sideways. Unlike regular currency, these people aren’t elected officials with an agenda. Instead, they’re usually your average Joe who believes in a world where the people have the power. And in the crypto world, people definitely have the power. So the best chance you have of staying on top of the game is to join in and listen to what the people have to say. Again, not blindly following speculation, but using your own knowledge and intuition to determine if what someone’s saying is worth noting because, at the end of the day, investing in crypto is what you make of (and from) it.