(ThyBlackMan.com) Cryptocurrencies are one of the biggest market trends of the century and with their popularity beginning to rise even more, there are a great number of reasons to start investing. Before you start with your investment plan, however, there are a few things that you should know. Here, we’re taking a closer look.
You Can Duplicate The Moves Of Leading Traders
One of the most exciting parts about cryptocurrency trading is the capabilities that a number of social trading and investment platforms can offer. One such feature is the opportunity to copy what other, more experienced and successful traders are doing on the markets, helping you to decide where you should put your money. This is particularly beneficial for traders who are new to cryptocurrencies and the way exchanges work.
Volatile Markets
As crypto-markets are volatile, investing in cryptocurrencies can be seen as an extremely high-risk investment. There are a number of top trading experts who have warned against investing in Bitcoin and other popular cryptocurrencies, but at the same time, there are a number of experts who believe that Bitcoin is one of the safest bets on the market. There are a great number of people who have made millions from investing in Bitcoin, with 19-year-old Erik Finman being a prime example, but it is important to ensure that you are prepared for the market’s well-recorded fluctuations.
Diversify Your Portfolio
We all know that Bitcoin is THE cryptocurrency that many want to invest in. We’ve seen Bitcoin surge from nothing to worth thousands in value, helping to make the very first investors millionaires, almost overnight. But it is important to remember that Bitcoin isn’t the only cryptocurrency on the market. Diversifying your portfolio is important to help ensure that all of your eggs are not in one basket, but which cryptocurrencies can you turn to? This is entirely dependent on personal preference, but some of the most popular include Ethereum, Litecoin, EOS, DASH, and Bitcoin Cash.
Keep Your Investment Secure
Before investing in cryptocurrencies, it is important that you are doing everything you can to keep your investment secure. We have seen a number of hacks occur on exchanges across the world in the past, with hundreds of millions of Bitcoins and other cryptocurrencies being stolen in one swoop. As a result, you will need to ensure that when investing in cryptocurrencies, you should store them in the safest place possible. Many believe that this is offline, although there are a number of highly encrypted wallets available on the market.
Research Before Investing
This is a particularly important step. While there are a number of options to copy the trades of experienced traders, researching is the most important step to ensure that your investments are entirely knowledgeable and make the best decisions in relation to your budget. Whether you’re investing in an ICO or a cryptocurrency, understanding the market and its past and future is the best way to help minimise risk.
Avoid The Pump & Dump Coins
If you’re seeing a cryptocurrency that you have never heard of before begin to surge 100% in value, then you may be witnessing what is referred to in the crypto-markets as a pump & dump coin. This is a coin with a value which is driven entirely by greed. Often referred to as ‘whales’, large investors will pump large amounts of money into a coin in order to manipulate markets, even though they own a large percentage of it. These are likely to crash quite quickly, so don’t always just believe your eyes and the value numbers.
Know How Much To Invest
It is important that no more than 3% of your portfolio is invested in one asset but knowing how much you should really put into cryptocurrency investment is important. Of course, you should only ever trade what you can afford to lose, and with a market as volatile as cryptocurrencies are, it is very important to be aware that there is a possibility that you could lose it all. However, cryptocurrencies are fun, and they are meant to be a key focus in the future which could mean that they are going to be around for the long-run. Therefore, don’t be afraid to put in more than just a few pounds – unless that’s all you can afford. Seeing what happens is all part of the fun with cryptocurrencies, and it certainly has the potential to be an enjoyable ride.
Anyone Can Invest In Cryptocurrencies
The most important thing to know before you invest, is that anyone can do it! Whether you’re a low-income individual based in the furthest corners of the Earth, or a high-net worth individual, as long as you have some knowledge and an internet connection you are able to start investing.
So, what are you waiting for? Start your cryptocurrency investment venture, today!
Now you have read through our 8 things to know before you invest, all you need to do is access your wallet, join up to an exchange and start investing!
Staff Writer; Craig Hall
