There’s a lot of hype surrounding crypto. Becoming a trader has become trendy as digital currencies see their popularity increasing. Society is becoming more open to e-money, with many businesses now accepting payments straight from the blockchain rather than cash or credit card. While this is overall incredible and signals a positive shift in the direction of a more extensive acceptance of and higher trust in technological solutions, it’s also essential to have a pragmatic view of the investments.
As with all trading, crypto is volatile, and its unpredictability means that you should take trading as a serious thing rather than something to do just because it’s popular at the moment. While becoming an investor is definitely not an incredibly difficult task, it should also not be treated lightly. If you’ve decided to join cryptocurrencies to your financial assets, you must do some preliminary research. It’s not a good idea to start any form of trading while completely in the dark about the markets, and crypto is no exception.
Below are some aspects you should explore before you start investing.
Image source: https://unsplash.com/photos/FquLC11A1AI
Learn about the currencies
Not all crypto is the same. One of the most regular yet damaging rookie mistakes you could make is to randomly invest in a currency you have no idea about. You must take your time to learn about what the currencies offer and research their blockchain technology. If you’re not savvy in computer sciences or coding, you must pick a source that explains the intricacies of blockchain in simpler terms. Don’t be deterred if you don’t perfectly understand something from the very beginning. Understanding the technology that powers crypto is one of the most critical aspects that can help you determine whether an investment is worth pursuing or not. Knowledge is indeed power when it comes to e-currency.
You can join an online community or forum where crypto enthusiasts gather to discuss with each other. When you’re new to the scene, it can be helpful to have those with more experience impart some of their advice to you. There are many hubs you can join. The communities are very active (after all, they have to keep up with the rapid changes in crypto), and someone will always be ready to answer your questions.
Consider your reasons
As mentioned before, crypto is getting increasing traction with the public. You could even say that it has become mainstream. While many people out there have never dealt with digital currencies in their lives, they are still aware of their existence and may even hold some basic knowledge about how they work. That’s an impressive feat, considering e-coins have been around for less than two decades.
However, when you’re an investor, there are very real drawbacks that come with the craze. One of them is the way in which it can be difficult for investors not to get caught in the hype. Before starting a crypto investment, make sure to assess your personal goals and determine the direction you want your trading to go into. New currencies always appear, but you shouldn’t rush into investing in them from the beginning. Newcomers to the market are more likely to be more volatile and offer less stability. While not all trades can be mounting successes, avoiding the ones that hold a small margin for positive results is a good idea.
Moreover, new altcoins are sometimes not genuine. Some of them can be falsely designed by scammers with the prospect of extorting money from you. In cases like this, you will likely never see your funds again. It’s a very upsetting experience, and it can affect you particularly hard if you’re just taking your first steps in crypto. Which brings us to our next point, which is:
Invest in a trusted currency
The crypto market is well known for its unpredictability, with scores frequently changing, sometimes daily. That can be daunting for someone who’s only beginning to get the hang of e-coin. It can feel like trying to build a foundation in the sand, and you may be questioning whether digital money is for you after all. The risk can never be completely eliminated, but neither is it ever absent in more traditional forms of trading.
One of the most important pieces of advice is to stick to the big names when you first start. Ethereum is a notable example. The open-source, decentralized blockchain uses smart contact transaction protocol, which allows for its application in financial services without the need for intermediaries such as exchanges or banks. If you want to start trading Ether, you should choose Binance, as they have the lowest transaction fee rate among all the major platforms. You’ll keep updated with ETH prices and be able to trade in increased security.
Picking a cryptocurrency with a solid reputation on the market, such as Ethereum, is guaranteed to bring you better results. It’s more stable, and you can have more confidence that your investment will pay off.
Digital currencies are not regulated by governments, meaning they’re not subjected to the same monetary policies. Instead, crypto’s value is determined by the supply available, availability, competitors and investor sentiment. The media and news are also very important aspects. E-currency’s status as a regulation-free ecosystem has both pros and cons. While volatility is a well-established drawback, it also means that it can be used across borders and is not subjected to the central authority controls as other currencies.
The nature of cryptocurrencies makes their values incalculable in most cases. It’s impossible to know exactly what direction a coin will get into. The level of uncertainty can be uncomfortable for most people who might be worried they’re wasting hard-earned money on thin air. However, if you’ve decided to invest, don’t be deterred by the naysayers. Do your research and decide for yourself how you want to proceed. Familiarize yourself with the technology, and you’ll discover that the mystery of crypto will begin to clear up, and you’ll start seeing all the opportunities hiding behind it more clearly.