7 Horrible Mistakes You Are Making With Cryptocurrency
The world of cryptocurrencies harbors several benefits for its investors, but it is not always sunny. If you have stepped into this world and only encountered severe heat waves or nerve-wracking thunderstorms, then there is something that you are not doing right!
Although investing in cryptocurrency comes with its risks, if you are facing a continuous downfall, then you are making some insanely horrible mistakes. At the end of this article, you will probably realize what went wrong.
1. Investing Generously in a Single Go!
One of the most apparent blunders that investors, especially the novel ones, make is putting everything at stake in a single attempt. Think about it yourself! If you end up spending all your money on buying coins in the first go, how will you be able to purchase the coins in the future when they’ll get cheaper?
One thing that you are supposed to engrave in your head when it comes to cryptocurrency is its volatile nature. The values of digital currencies never remain the same. They fluctuate occasionally. Sometimes the odds are in its favor, and sometimes not. No matter what the case, putting all your effort in a short period is nothing but stupidity. It will deprive you of future investments when the prices will get lower.
So you have to be patient if you want to succeed. All you need to do is stop monitoring the price charts throughout the day and focus on some productive activity. Unfortunately, looking at price charts will keep on messing with your head until you end up spending every single penny. If you want to touch the sky up high, then plan your investments and just stick to that customized timeline.
2. The Buying High and Selling Low Dilemma
Do you know why most retail investors end up losing a considerable sum of money after investing in cryptocurrency? It is because they buy the crypto coins at high prices and sell them at low prices. The story goes something like this:
Suppose you have decided to invest in crypto. Whenever the price rises, most people, including you, will feel like this is it! It's time to put all your money in crypto because this is the maximum value that it can reach. You end up buying most of it because you are scared of not seizing the best opportunity on time.
What happens when the price falls? You panic and get anxious at the thought of losing all your money. So you end up selling all those coins that you bought at such high prices. This is where you make the second wrong decision.
First, you spend all your money. Second, you sell all your coins because of the fear of losing more. So you have to take baby steps in case of investing in crypto and then sell your coins at higher prices. That is how you are going to make a profit.
3. Saying Goodbye to Your Long-Term Investment
Emotional stories effortlessly sway people. These stories may be related to success in business, relationships, or anything of the sort. There are various blogs, videos, and stories of people available online who ended up becoming millionaires in a short period because of cryptocurrency. Most of these stories are true, no doubt! But not everybody can get such good luck.
Now what happens is that people end the long-term investments that were providing them with timely profits and put all that money on crypto. Their dreams shatter when the result is not what they expected it to be. Hence, the wise choice is to invest only your new money or spare money into the crypto market. Don't even think about investing borrowed money!
4. Storage of Coins
Another mistake that is prevalent in the retail investors' crew is that they do not know when is the right time to sell. Most people think that they will sell the coins when they get the desired maximum profit. But you know what human greed is like. There is never a maximum profit. So even when the value rises to its highest, they keep on waiting for more.
If you’re doing this, your prosperity is being hindered. You need to have a proper strategy and plan about when to sell the coins. Plus, to make things more convenient, set a target for profit and loss. The moment you reach your targeted profit, sell your digital currency.
5. Saying No to Diversification
This needed to be highlighted! Because most of the investors are too naive to realize it. Portfolio diversification is the key to gaining considerable profits in case of any investments be it cryptocurrency, real estate, or any other business. You need to understand that putting your trust in only one type of investment is another name of insanity.
When it concerns the matter of cryptocurrency, Bitcoin is the king, and there is no doubt about that and your largest investment should be in this cuyrrency. But still, depending only on it for profits is not right. To keep your investments optimized, you need to divide your money into varying assets, Ethereum comes on top of the list and consider adding one or two more such as Cardano, Polkadot, Uniswap, Ripple and others.
6. Timing the Market
One of the chief errors that investors end up making is that they just stick to the screens and keep on monitoring the price charts. They fail to understand that predicting the price movement of cryptocurrency will bring them nothing but misfortune. That is why trying to time the market is a bad idea.
To ensure the gain of your desired profit, you should set a proper price target. Follow this target and then buy and sell accordingly. Sticking to the plan is the only solution to all your problems.
7. Putting All the Cheap Coins in Your Wallet
Everybody wants to live a wealthy and peaceful life, and no doubt money is one of the primary keys that can get you these. In the cryptocurrency universe, it is considered that buying the coins when they hit their lowest is the best idea.
This notion gained prominence when Shiba Inu or Dogecoin had grown thousand-fold to their initial price. But that does not always happen. When a coin reaches its lowest value, they are at the risk of going down to zero in no time. This ends up destroying the lives of all those investors who bought the maximum of them when their values were lowest.
There were hundreds of such coins that faced this fate and thousands of investors who lost everything they had. That’s why, it is best to take hold of the stable coins. Even if you desire to invest in low-value coins, make sure to do proper research and then take the step.
If you want to ace the race of digital currencies, it is best to gain as much information as you can. Before investing your money. Make sure to do thorough research and keep the points mentioned above in mind. If you do that, you are most likely to receive good news!
OR YOU CAN JUST HODL
The idea is to hold on to your precious Bitcoins and possible other Cryptocurrency. There are only 21 millions possible Bitcoins and as times goes by they will only become more scarce. Read the original and now cult “I AM HODLING” link https://bitcointalk.org/index.php?topic=375643.0
Disclaimer: We do not give any financial, tax, legal, investment, buy/sell or any other advice and/or recommendations – read and act on your own risk. Consult a competent advisor before you make decisions.
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