Making safe Cryptocurrency Investments : Precautions to imbibe
We are part of something really exciting and still very much in its infancy. Being in control of our investment is very important. Knowing what, how and why to invest in certain Cryptocurrencies is knowledge we should all try to acquire as much as possible.
The world is gradually becoming much more aware of Cryptocurrencies and their various implementations in solving real world problems. This has attracted lots of fresh, inexperienced faces with some given the fallacy that they will become instant millionaires or are buying Apple stock (believe me, I read that somewhere online).
These are a few precautionary measures needed to ahead of the situation and if imbibed, generate lots of profit and safeguard your initial investment.
Invest only what you can afford to lose - This should be the official mantra for not only Cryptocurrency, but other forms of trading as well. Its’ applicable to virtually all other aspects of our daily lives. Currently, many folks are taking loans, selling off lucrative assets and channeling them into any coin they lay their sights with the hope it becomes the next ‘Ripple’ or ‘Moon like Bitcoin or Ethereum’.
This is not only reckless but could have long-lasting consequences if such outlay goes south. The best way to go about it is to consider the money gone as soon as you invest. Imagine that it doesn’t exist ( can be hard for some of course). This way, you won’t be forced to check the daily charts or BlockFolio without panicking.
Never put what you can’t afford to lose.
Buy at dips - It is inevitable. Cryptocurrencies are highly volatile commodities. You can easily lose half your initial investment in a day due to crazy price fluctuations. It has been this way for years and will remain the same for many more years to come. How to trade smart and play the market is a skill very few people get to master.
This advice is simple, one of the best ways to ensure higher ROI is to time the market, wait patiently and buy at dips (when the price of the coin(s) falls or drops). Easier said than done at times. Some of us don’t have that luck, we tend to buy when the price is at an all-time high (ATH) only to see it crash hard the very next day.
Research, Research, Research – It’s mind-boggling the rate the new wave of green investors, speculators or better put, gamblers throw money into cryptos that they barely even heard of. They don’t bother to read the white-paper, check out the team behind the coin etc. Heck! Some of these coins don’t even have an updated website.
The surge in ICO’s further proved that we are currently threading a very dangerous path here. With projects with barely any working product & functionality raising millions of dollars in cash.
I for one don’t see why a messaging app for instance (Status) needs such an amount to run. Many just want to jump right in without carrying out proper due diligence.Sparing a few minutes for an apt research will bring about long-term dividends and save you from scams.
Know the difference - Once you know the difference between savings and investment, that would help give you a much clearer perspective and control over what you’re getting yourself into. Nobody can see or predict the future. Who knows whether the entire internet shuts down permanently for example, or cryptos become treated like marijuana and become banned unfairly (hopefully not).
While those instance may seem far-fetched, it just raises the question to what happens if you were to lose your investment due to circumstances beyond your control. This resonates with my first point of, ‘Investing only what you can afford to lose’
It wouldn’t be prudent or wise to convert all your savings into cryptocurrency. Fiat will still be relevant for a long time to come and keeping some of it is highly advised and keeps a realistic outlook.
Remember, your savings is not the same as an investment. Hence, know the difference.
Security - Enough can’t be said here. Always ensure to protect your investment judiciously from hackers and no-good-doers. Being security conscious is very important in order to prevent your hard earned money falling into the wrong hands.
Some Tips: Don’t leave your funds on exchange site wallets.
Transfer them to adequate paper, hard wallets which are more secure. Hard wallets like Trezor, Nano Ledger S etc. are good examples to use for better security. Also never reveal your passwords and private keys to anyone. In fact, use 2FA authentication (Google’s works very well) on all your emails, exchange accounts, online wallets etc.
TRADE & INVEST SAFELY
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