Boost Your Income
Crypto investing has been a bit of an education for those who have never put any money into an investment before, especially a market as volatile and cutting edge as crypto. It has offered an opportunity for those with a few hundred, or a few thousand, to become involved in a market that up until now had been reserved for “approved” or “accredited” investors. However, the “newbie” crypto investor may not realise that all markets are potentially dangerous places to be unless you do your homework and have realistic expectations.
Some mistakes crypto investors often make:
Panic selling; selling when the price drops quickly. Crypto is notoriously volatile, double digit percentage moves in minutes is not unheard of, a drop in minutes just recover has costs panic sellers dearly. Don’t sell in a rush. Ask yourself, has anything fundamentally changed in why you own crypto? Probably not.
Falling for biased media; major news sites will sometimes release very negative, and often, threatening news. Doom and gloom sells. The news may be about a country banning the use of cryptocurrencies, or about how Wall Street thinks crypto is going to zero. A lot of these news articles are intended to generate clicks, controversy, and even FUD (fear, uncertainty and doubt). It’s often extremely exaggerated.
Ignoring fees; when you start trading your portfolio you can end up making many trades, hoping to make a profit. While this is logical in theory, fees can quickly kill you. Even if they are low, it can all add up. Fees can seriously affect your profit. Be aware of them.
“FOMOing” the acronym for ‘fear of missing out’; the FOMO crypto trader buys hoping that this is the next big run, ‘this trade is the one!’ This affects many and it’s a huge problem because it can cause irrational trading decisions. A “Swing for the fence” type of decision. But what happens when this trade turns out to be nothing? Do you dump it all? No, you have a longer time horizon with a calm, structured, logical investment decision behind it.
Not “HODLing”, even a little; Immediately after making an investment you see the crypto market fall, investors who are impatient cut their losses immediately because of emotions. The cryptocurrency market can rise and fall dramatically. Accept it, it is the price that is paid for being an early investor.
Crypto investors need to be patient and think in longer terms, unlike December 2017, there are few if any instant wins. Now more than ever, specific cryptocurrency purchases need to support projects with strong fundamentals. Does the crypto project have proper leadership? Is there a proven track record of meeting project milestones? Does the project have a unique technical edge? Is there a broad scalable potential user base along with a relatable vision of the future? If you struggle to answer these questions, you could find yourself in trouble.
If you are, like most, unsure, a sharp strategy is to buy a crypto index token like DCX10 which lets the market decide and gives you exposure to those that the market deems likely to be successful.
