Making Money Online: Cryptocurrency Investment Tips
Everybody could do with some extra cash now and then, and looking for ways to develop a passive income stream has become more popular. Arguably, investing is the best way to do this. There are, of course, a number of different assets that you can choose to invest in. However, they all do require research to ensure that you are going to get the best possible return on your investment.
Cryptocurrency is one of the most popular things to invest in today because it is often more accessible to the layperson. That isn’t to say that investing in cryptocurrency doesn’t have its risks; it does, which is why we have put together the following cryptocurrency investment tips. Keep reading to learn more.
Think Before Investing
Arguably this first cryptocurrency investment tip should be somewhat obvious. It makes sense to take your time, do your research and choose the form of cryptocurrency that you want to invest in carefully. Following advice from other cryptocurrency users can help, but realistically, you should always subsidize your own understanding with outside verifiable sources. Unfortunately, because investing in cryptocurrency is a popular choice, there has been an uptick in scam opportunities. Which is why doing your own research is so important.
Luckily, there are platforms like CryptoEQ, which has a number of resources designed to educate you more on different cryptocurrencies; for example, if you want to learn more about Stellar, Ethereum, Bitcoin, or even if you just want to learn more about cryptocurrency in general, it can really help.
Investing is a great way to set up passive streams of income; however, just because it tends to create passive forms of income doesn’t mean that it is easy. Becoming a savvy investor takes work regardless of what you plan to invest with. Investing in cryptocurrency is not necessarily going to guarantee you easy money. This is why you need to try to develop the right mindset when it comes to investing overall. In addition to thinking about the forms of cryptocurrency and the market overall, you should also start to do some work to learn more about investing as a financial practice too.
Also read: Top 10 Investing Apps for Investment
Always Set Limits
Regardless of what you invest in or the frequency in which you invest, it is imperative that you consider the risk that investing could have on your money management or financial standing. Setting investment limits either weekly or monthly can help. Think about your budget and how much you can realistically dedicate to investing each pay period.
You do not want to leave yourself short. While a return on investment is ideal, it will not always work out this way which is why you need to be prepared to potentially lose that money, meaning that you shouldn’t overinvest. Think about building an emergency fund for any unexpected expenses that might occur; it can also help if you experience any losses.
Diversify Your Investment Portfolio
Diversification has long since been a solid investment strategy. It helps to mitigate the risks. Limiting your investment to one particular asset can be incredibly risky. You need to spread your wealth, whether this means investing in multiple forms of cryptocurrencies or diversifying and investing in stocks, bonds, or other asset classes too. This means that should one area of your portfolio depreciate or lose money; then it will hopefully be offset by gains in another area. Any platform or cryptocurrency that tries to sell users on going all-in on investing with them should be a red flag to you.
Investing very rarely yields instantaneous results regardless of what you are investing in. Cryptocurrencies are also inherently volatile, even the more stable ones. They are not without risk; their value fluctuates constantly. As an investor, this is something that you need to be aware of. A lot of people panic and sell when the value starts to trend downward, trying to mitigate their losses. Hanging in there until the value starts to trend upward again is arguably the smarter move. Holding your investments and waiting for the right time to sell or trade can take time, be patient.
Also read: Top 30 Money Making Apps for Extra Income
Be Mindful of Low Prices & Try to Spot Scams
Rushing to buy cryptocurrencies simply because there are deals or offers or even because the price is lower is not always advisable. This ‘bargain’ mindset is not always applicable when it comes to investing. There could be a number of nefarious reasons why the price is low, or the platform is offering deals, not all of which will work out for you.
Maybe the platform is not as secure as it once was because the developers have left, or maybe it is simply dwindling in popularity. Fewer users and deals often indicate issues which means that you should think twice before investing. Otherwise, you could experience losses. While it is less common, you could also find yourself convinced to buy fake coins for phony cryptos.
As well as being wary of deals and bargains because they could indicate issues within the platform, you should also be wary because they could be scams. Unfortunately, the rise of the internet has paved the way for a new generation of digital scammers. Most of the time, keeping your investment secure simply relies on solid internet safety practices.
Firstly, you should never give out your personal details to someone online; phishing emails are common, ignore them. To invest in cryptocurrency, you need to have somewhere to house the coins. This means a digital wallet. The wallet houses your coins as well as your information. You need to choose a secure, password-protected wallet. Do not give the password out to anyone.
Another scam that you should be mindful of is spoofing. Cryptocurrency scammers flood small platforms with fake buy or sell orders which then effects their prices, either driving them up or down. Sometimes the value will be abnormally high, and other times they tank it completely. To an amateur investor, this might seem as though it is posing a great opportunity to get in while the price is low and wait for the uptick or get in at the lowest possible price while it is still climbing.
However, the scammers are the ones that tend to sell at the best possible moment, making a profit before they reverse the orders, and the price stabilizes; the unwitting investors are then often left holding coins that are never going to see the same value that they were bought for.
Cryptocurrencies are still a fairly new technology. In terms of fintech and currencies, they are still in their infancy. This could mean exciting developments and things evolve because they have yet to reach their full potential. Think about all of the effects that cryptocurrencies have already had on the changing financial landscape.
The opportunity to get into cryptocurrency is absolutely still there; just because you haven’t done so yet doesn’t mean that you have missed the boat. That being said, to secure the best return on your investment, it makes sense to get in before the market is flooded by investors, which could potentially see some of the cryptocurrencies devalued. If you are an amateur investor, then be sure to keep in mind the above tips.