By Mohammed Roshan
If you are a beginner looking to get started in your cryptocurrency investing, here are some tips you can use to safely invest in cryptocurrencies. Indeed, regardless of market conditions, the things you need to know and look into before investing in cryptocurrencies are pretty much the same.
Here is a short list that will help you on your journey:
- Take some time and first, understand the basics of cryptography and the tax rules/regulations in your jurisdiction
It is completely natural if the world of cryptocurrencies overwhelms you at first. But it usually goes away with time. The first thing any investor or trader needs to do is understand the basics.
It is always important to start with the necessary research before investing your hard-earned money in the market. Investors need to understand the basics of blockchain technology, what Bitcoin is, what problem Bitcoin seeks to solve, and how the mining process works.
It is recommended to start with the oldest and most trusted crypto, Bitcoin. The more you understand Bitcoin, the easier it will be to understand the rest of the crypto ecosystem.
Investors should also take the time to understand the prevailing tax rules and regulations in their state or country before investing.
- Understand the risk involved and only invest what you can afford to lose
No matter who says otherwise, there is always a certain degree of risk that comes with investing. What investors can do is follow the tips to keep themselves aware and safe to minimize their risk as much as possible.
It is very important to understand that you only invest an amount that you can afford to lose in the market. This may sound like common sense but, nevertheless, it can be really easy for even savvy investors to get caught up in the flow and throw money away in the market. While the stories of investing all of your retirement money in cryptocurrencies and making a killing are definitely inspiring, this is really not advisable.
More importantly, if your investing is causing you restless nights, affecting your health or mood, then you’re either investing more than you should or should reconsider whether you really need to invest.
- Start small and easy
It is always recommended to start with small amounts or passive investments in the beginning.
In fact, one of the ways this can be done is with a platform like GoSats, which helps you passively invest in Bitcoin every time you shop.
Alternatively, newcomers could start by investing in blue-chip coins like Bitcoin, which are relatively safer investments. The best way here would be to average your investments over regular time periods – on a daily, weekly or monthly basis.
Once you better understand the basics of cryptocurrencies and the market you are investing in, you can continue to allocate more funds or invest actively.
- Research the coins, exchanges, and platforms you plan to invest in
One of the worst parts of cryptocurrencies are the scams, both in terms of coins and exchanges/investment platforms. Indeed, recently, with cases of fraud and mismanagement of funds in reputable cryptocurrency companies, investors need to be more careful than ever.
Do proper research on the coin or coins you plan to invest in. This can be done by reading the white paper, understanding the project and the team behind it as much as possible. Investors are advised to stick to “blue-chip coins” like Bitcoin that have been around for much longer or at the very least allocate a significant portion of their portfolio to such assets.
You are advised to carefully review the details about the exchanges or platforms you are investing in. After all, it’s your hard-earned money you’re investing!
- You are not lagging behind in Crypto
It is natural to feel that you are lagging behind in cryptocurrencies and that the time for making life-changing money in cryptocurrencies has long since passed.
You may already be thinking this way, and this can lead to chasing high returns by investing in shady projects or without proper research. Understand that the world of Bitcoin and cryptocurrencies is still in its nascent stage, is booming, and has a lot of potential to grow. We are all still early.
We hope this helps you navigate the market better and stay safe. The world of Bitcoin and cryptocurrencies can be life changing and can lead you on the path to financial freedom. However, it is just as important to have fun and enjoy the ride.
The author is co-founder and CEO of GoSats
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