Unless you’ve been living under a rock, chances are you’ve likely heard of or experienced the crypto boom in one form or another.
Whether it’s Bitcoin, Ethereum, Litecoin, or Dash, the cryptocurrency market is clearly headed on a continuous bull run. Even now, you may be tempted to get aboard the crypto train to get your hands on some of that sweet, sweet cryptocurrency.
However before jumping in with both feet, you’d do well to know that the crypto market is a highly unstable one with price valuations fluctuating wildly on an hourly basis. Crypto fortunes have been made and lost overnight and more than one amateur investor has lost everything riding the train.
To prevent yourself from becoming a statistic, let’s take a look at some key crypto investment strategies that everyone should at least be familiar with.
1.Have a plan
As simple as it sounds, the key to successfully investing in crypto lies with you having a plan - and sticking to it.
The crypto market is a fickle mistress and you need to be absolutely prepared to make a decision in a moment’s notice.
When investing, always have an endgame in sight. Too many investors have gotten carried away by the tides of the market only to end up washed up and broke with nothing to show for it.
Give yourself a target and a timeline and be absolutely sure that you keep to it.
For example, give yourself $3000 and 3 weeks to get a feel for the market. Once that time period is up re-evaluate what needs to be done.
Should you stay on or move on? If you’re making a loss, is it time to cut and run or do you want to stay?
If you’ve made a profit, crystallize on it and move on. Don’t get greedy and never assume that you can predict what happens next.
2. Never invest emotionally
Building on our previous point is the fact that you should never let emotions get in the way when investing. The most common pitfall faced by new investors is FOMO or fear of missing out
Just take a quick look at any forum or social media site such ad Facebook or Reddit and you’ll quickly see why. Most amateur investors end up hopping on the hype train hoping that things will pan out.
Most tend to act irrationally and either end up buying too early or selling too late. Some examples include buying into a crypto at its peak or selling just as the market crashes. Thus leading to some coining the term “buying high, and selling low”.
Before making a decision, take the time to survey the market and study trends. More often than not these indicators will give you a sense of what will happen next hence allowing you to make a better-informed decision ahead of time.
3. Do your homework
The best investors always believe in doing their research first before committing. In a market full of white noise, following the trend can be fatal.
Before you start investing, study the assets that you intend to buy. Educate yourself and first understand how the cryptocurrencies actually work.
Cryptos are so much more than digital assets to be bought by investors. They are in fact gradually finding their way into the real world and various industries.
From fintech to retail and even manufacturing, blockchain tech and cryptos in turn are more than just miracle assets. Additionally, study up on events around the world as these can affect the performance of various cryptos.
Make sure to browse through expert lists and reviews on the best crypto wallets for example. You can click here to read an excellent article from Tezro about that.
For example, rising fears of global inflation have sparked an interest in Bitcoin thanks to their inflation proof nature. Thus leading to an all-round increase in cryptocurrency valuations.
4. Work only with trusted partners
The decentralized nature of cryptocurrencies while advantageous is not without its share of shortfalls. A lack of government regulations has resulted in various high-profile scandals that left investors penniless.
Because of this you should always work only with trusted reputable crypto exchanges that have a proven track record. While simple this can go a long way towards safeguarding your investments.
Investing in cryptos can be a risky proposition if you are not prepared. Taking the appropriate steps to keep yourself safe will save you from needless pain.