Do you want to buy Bitcoin but don’t understand how cryptocurrencies work? Put a stop to it right there! Digital currencies can be an exciting investment prospect, but inexperienced investors risk losing money if they are duped by scammers or invest in a cryptocurrency that has no history.
We’ll go over nine things you should know before investing in the cryptocurrency industry in this article.
- It’s All About the Timing
Cryptocurrencies like Bitcoin and Ethereum are extremely volatile and can move significantly without warning. In general, cryptocurrency investors strive to “buy the dip,” or buy more of an altcoin when its price falls.
- Bitcoin can be purchased using traditional currency.
Coinbase and Binance are two cryptocurrency exchanges that cater to new investors. You can use your debit card, credit card, or bank account to purchase virtual currencies. If the widely circulated rumors are to be believed, financial firms such as PayPal are also intending to participate.
- Be Wary of Scammers
You may have seen a lot of buzz on social media about an investment technique that promises massive profits from obscure crypto assets. Others make exaggerated predictions about how Bitcoin’s price will climb. Unfortunately, there are some dishonest people in the crypto industry, and Ponzi schemes and exit scams have cost billions of dollars. A short advice on how to avoid a crypto scam may be found on CoinMarketCap’s blog, as well as another here on how to keep your crypto safe.
- Create a financial plan.
Successful bitcoin investors design a strategy for their holdings. Setting a limit order, for example, can ensure that their Bitcoin is automatically sold when prices reach a specified level. You can even replicate the moves of established traders in the crypto market on several crypto exchanges. CoinMarketCap and DataDash collaborated to create a swing trading guide for cryptocurrencies, which you can find here.
- Too Good to Be True?
Scammers depend on instilling a sense of FOMO, or fear of missing out, in their victims. Consider your options carefully before investing in cryptocurrencies, and keep in mind that if anything appears too good to be true, it probably is. There are plenty of unbiased evaluations and fiercely independent news sources in the cryptocurrency business that can assist you in making an informed selection.
- Initial Coin Offerings (ICOs)? Make Your Own Investigations
In 2017, initial coin offers (ICOs), in which corporations generate and sell new cryptocurrencies, were extremely popular. Despite the fact that the market has cooled, there are still some investing chances. This can be incredibly dangerous, so if you’re considering an ICO, make sure you read the white papers carefully and consider whether their business genuinely requires blockchain technology. You’d be shocked at how many businesses attempt to join the bandwagon.
- Be wary of FOMO (fear of missing out).
Popular cryptocurrencies might see their prices grow dramatically and quickly in a bull market. Proceed with caution – buying BTC at inflated prices could result in significant losses if the market corrects.
- Select a Reliable Crypto Exchange
Look for a crypto exchange with a high level of liquidity, a diverse range of crypto assets, robust security measures, and a high degree of trustworthiness. For people buying Bitcoin for the first time, CoinMarketCap has a page that assesses exchanges based on how easy it is to buy cryptocurrency and provides more information about their regulation and acceptable payment methods. It may be found right here!
- 9. Keep your private keys safe.
Last but not least, keep in mind that you must safeguard your cryptocurrency. One of the best ways to do this is to use a hardware wallet, which will keep your crypto assets safe and secure while keeping you away from the internet.