Nowadays, anyone interested in making investments is constantly bombarded with information and publicity about cryptocurrencies.
The tremendous value that some of these currencies have reached during the last few years, and some well-known cases of great fortunes raised overnight, as a result of crypto investments, have made thousands and thousands of people around the world decide to invest in cryptocurrencies.
However, it is important to keep in mind that investing in virtual currencies such as bitcoin or ethereum is not the same as investing in the stock market or in an ordinary business.
It is important to know the ground you are treading on and avoid mistakes that other people have suffered.
The worst mistakes when investing in cryptocurrencies
Every investment is a risk. This is something that most expert investors know and that those who are just starting out in this exciting world should also know.
No matter what you are investing in, there will always be a risk of losing your investment. In the field of cryptocurrencies, this is especially true.
Be careful about investing all your money in cryptocurrencies. Don’t do it. Don’t be one of those enthusiasts who only pay attention to the moments when bitcoin rises, forgetting the falls the currency has suffered in the past.
There is a phrase that sums up what you should do: invest only the amount of money you can afford to lose. It’s the best advice you can get.
Don’t buy the wrong cryptocurrency. It may be confusing but there are other cryptocurrencies that use the word “bitcoin” but are not the original bitcoin. You’d be surprised how many people have invested incorrectly because of confusing the name of the currency.
Investing in a single cryptocurrency is also often one of the most repeated mistakes. You have probably heard of bitcoin, ethereum, dogecoin and Litecoin. Having a diversified portfolio is the most recommended by experts. Some even point out that it is advisable to bet some money on the lesser-known and more promising cryptocurrencies.
One of the greatest dangers faced by those who invest in cryptocurrencies is their volatility. Never underestimate the effect of cryptocurrency volatility. It is not an easy thing to watch your entire portfolio plummet in a matter of hours or minutes. It’s a latent risk and you should be prepared for when something like this happens. The good news is that many times the value of cryptocurrencies will go back up. So you must have a cool head and a lot of patience. Desperation is not the best attitude for an investor in the world of cryptocurrencies.
Very recently my German investor lost $200 million in bitcoin. Do you know what happened? He simply lost the password to his digital wallet.
It’s a more frequent mistake than you might imagine. Some estimates say that 20% of all bitcoins are locked up in wallets whose owners have forgotten the password. Unbelievable, but true!
You have to be very careful when informing yourself about trends in the cryptocurrency market. A couple of Elon Musk’s tweets made thousands of people invest in dogecoin. Some managed to make some money, but the vast majority ended up losing after the value of this cryptocurrency plummeted.
It is important that your investments are based on data and statistics, not just news and opinions of celebrities or rich people who like to play with the markets, as if they were economic gods.
Remember that investing in cryptocurrencies is something relatively new and full of opportunities but also of traps and obstacles that try to take advantage of the interest of small investors. Not all that glitters is gold.
Do you want to learn how to invest in Bitcoin and other cryptocurrencies? For example, the Dash cryptocurrency over the past year has surged by 200%, and its maximum price has risen above $ 443 per coin, which is 400% higher than its price since the beginning of the year. Learn more on this crypto site how easy it is to invest in Dash.One of the most important steps is to get informed and study. You must be up to date, updated, in terms of trends and movements in the cryptocurrency market.
Knowing the most common mistakes and trying to avoid them will not guarantee that your investment will be a success, but you will be more prepared to succeed and make money.