Successful in gaining significant traction in recent years, cryptocurrency has caused quite a frenzy, especially in the investment sector. It is certainly the talk of the town even though much of it still remains shrouded in mystery.
As a result, it is not very clear to novice crypto investors how to best invest in cryptocurrency, with many banks and most mainstream brokerage platforms refusing to have any part in it. Also, the price swings tend to be massive and frighteningly volatile by standards of the traditional stock and bonds market. Recent developments are the epitome of how volatile the crypto space actually is.
The first week of 2021 was a roller coaster for the price of Bitcoin, the first digital asset to beget the ecosystem of numerous cryptocurrencies. With its value fluctuating, Bitcoin finally managed to hit a new record high of $42,000 per unit.
However, on January 11th, Bitcoin’s value tumbled recording a drop of more than 20% while some other cryptocurrencies fell still further.
Unfortunately, this isn’t breaking news. In late 2017, Bitcoin fired investor’s imaginations with a monster rally only to crash hard in 2018, losing about 80% of its value. And investors are still unsure as to why.
The bottom line is that the crypto space is no child’s play. It can be a scary place especially if you’re new to the unexplored world of digital currencies. Taking your first few steps along the blockchain path can be a daunting task but it is also equally important. Make a few bad initial decisions and you could be deep in debt in no time.
Hence, here’s a guide to push you in the right direction and onto the path to a lucrative crypto future. Following these tips will not only help you make the right decisions but help fill your bank account instead of emptying it:
Only Invest What You’re Willing To Lose
An experienced investor will tell you to only invest the amount that you can afford or can stomach losing. The prime purpose of investment, whether it be traditional or digital, is to add more value to your existing wealth, not lose it entirely.
Therefore, it is not only smart but a cautious move to invest the amount you’re willing to lose. That way, even if you suffer losses, they won’t completely strip you of your wealth and won’t be as big or damaging to alter your life entirely.
Maintain A Healthy Crypto Portfolio
This involves investing in more than just one coin. This strategy helps to maximize profits and minimize losses.
The old adage “Don’t put all your eggs in one basket” has never rung more true. Diversifying your portfolio by investing in different cryptocurrencies will allow you to hedge the potential risks involved so that you’re not too exposed to any single investment.
You win some, you lose some is still better than you lose all. Diversification can help stabilize gains. Granted, you won’t be able to reap all the benefits of a skyrocketing prime coin but you also won’t lose everything in case it’s value plummets.
Consider Using Trading Programs
Trading platforms offer trading programs that are used by traders and investors, whether seasoned or beginners, to raise profits as a result of the highly volatile market space. Such programs usually make use of Advanced Artificial Intelligence (AI) algorithms to generate trading signals.
Now, many programs offer auto-trading options allowing their users to benefit off of their investment without even taking an active part in the trading process. This is a great way of making money on the side but more importantly, these programs have proved to be a safe haven for novice crypto traders.
An example of one such program is the Bitcoin Prime that is a powerful auto-trading system, trading at extremely high speeds and hence, capitalizing on even the slightest market movements. You can check out the bitcoin prime official website for more information.
Don’t Invest Based On Hype
Just like with any traditional investment, ignoring the hype and filtering out the noise regarding certain coins will be crucial.
Where investment in cryptocurrencies is concerned, you shouldn’t base your decisions on what others are saying. Rather, a smart approach would be to thoroughly study the market, use the knowledge gained to take calculated risks, and ask for guidance from experts where necessary.
Learning to discern between those that have sufficient knowledge about trading and investment strategies and those that don’t will be a task just as important. Doing so will allow you to successfully filter out information and form your own strategies.