Recently a worldwide crackdown on cryptocurrencies, whether it’s the ban on binance by the United Kingdom or wider Chinese restrictions, the crypto market has seen some cold winter dips.
However, the crypto business is not massively affected. Infect the experts believes that the crackdown brings the maturity to the crypto market making it more stable and secure for the investors to invest.
The trend suggests that the crypto is becoming more household than ever before. More people are joining on board. If you’re thinking about investing in cryptocurrencies, it’s a good idea to think through first. Here are 7 crucial hacks to invest in cryptocurrencies.
1. Try to be an early adopter when it comes to cryptocurrencies.
Well, my first point is very simple if you actually want to jump into the world of crypto and that is, try to be an early adopter of new cryptocurrencies. Let’s face the truth, there are more than 4000 cryptocurrencies out there so to invest into those and making a good return is very difficult now. Most of the famous cryptocurrencies like Bitcoin & Ethereum are expensive to buy and one rule we all should follow in investment is buy low and sell high.
But the ship of crypto like Bitcoin has long gone for the beginners. I mean, I won’t recommend you to invest your saving in crypto like bitcoin simply because the rate at which you will buy is definitely going to be very high ($34,680 as per coinmarketcap at the time of writing this article). Therefore, if you buy the crypto like at that price point, then the risk of that investment is very high.
So, forget about Bitcoin, instead you should look for the cryptocurrencies that are very low in price but has a significant futuristic idea that could potentially propel the crypto price in the future.
2. Read as much as you can (Research)
One of the things I noticed about the people in crypto world is that they lack research. The best explanation people have for their crypto investment is because their friend bought it or heard about the hype around that particular crypto. And when you invest with that logic, that is mostly likely you will lose your investment.
That’s why I empathize on, read as much as you can before investing.
Read about their published whitepapers, read about the blogs from crypto experts, read about the news, so basically you got my point.
3. Focus on Crypto’s significance rather than price
The third point on my list is the importance of the particular crypto, and I think is the most important factor whether the crypto is going to be successful or not. I highly, recommend people to go through crypto’s whitepapers and try to understand the significance of that project. I mean if a crypto project holds a groundbreaking idea in any field whether it’s in finance, environment or world in general then that crypto has the potential.
For example, Bitcoin. When Bitcoin was invented the idea behind it was groundbreaking (decentralizing finance) so sooner or later people start believing in the project and hence the success. When Ethereum was invented the idea behind was smart contracts which was again the groundbreaking and hence the success.
Therefore, I recommend you to look for the ideas rather than just the hype. The crypto like Safemoon is all based upon hype without any groundbreaking ideas that can assist the world for the better. So, the risk in such type of crypto is very high unless you want to take that risk.
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4. Make sure you’re prepared in case if it doesn’t go according to your plan.
Though bitcoin has become more widespread in recent years, it is still regarded as a highly speculative investment. As a result, if you’re going to invest in bitcoin, you should assume that you’ll eventually lose all of your money.
You should also expect your cryptocurrency’s value to change dramatically from day to day, as the crypto market is far more volatile than equities. That is why keeping cash reserves is so important.
If you don’t have enough cash in the bank for an emergency, you may find yourself in a scenario where you need to sell cryptocurrencies to get cash. And if that cryptocurrency goes down at the time, you’ll be stuck with a loss for the rest of your life.
5. Examine several crypto coins in different markets like Coinbase, Robinhood, Binance, Wazirx etc
Despite the fact that some cryptocurrencies are more well-known and discussed than others, there are hundreds of more digital coins on the market that you may potentially acquire.
Rather than simply saying it’s time to buy cryptocurrency and jumping into the bandwagon, spend some time researching various crypto markets like Coinbase, Robinhood, Wazirx and so on before finalizing your purchase decision.
6. Recognize the dangers
When you acquire stocks, you always run the danger of them losing value over time and never being worth what you paid for them. Even bonds, which are thought to be a relatively safe investment, are not without risk. Companies with excellent credit ratings may experience financial difficulties, at which point they may begin to default on bond interest payments, despite the fact that this is a rare occurrence.
However, bitcoin comes with its own set of risks. When you buy bitcoin, there is always the possibility that it will lose value over time. However, because the digital currency market is significantly more unpredictable than the stock market, your coins’ value could plummet overnight. Before investing in cryptocurrencies, be sure you understand how hazardous it might be.
7. Consider how cryptocurrencies will fit into your larger plan.
My overall investing strategy entails putting together a portfolio of high-quality investments that I believe will hold and grow in value over time. And, while I’m considering purchasing cryptocurrencies, I don’t anticipate it falling into the same category. I don’t expect to acquire cryptocurrencies now and keep it in my retirement account, though that could change in the future.
The point is that if you’re going to acquire cryptocurrencies, you should think about how it will fit into your overall investment strategy. Perhaps you’ll utilize it to diversify your portfolio. And perhaps you have a different perspective on cryptocurrencies than I do, and believe you will retain it in your portfolio for a long time. The idea is to think about it so that it can guide and ground your decision.
Cryptocurrency is growing, maturing and increasingly becoming popular as an investment option, and it could be a good fit for you. Just make sure to cross these items off your list before you start investing into one.