Cryptocurrency investing mistakes are not literality for newbies, it is a compilation of past experience from which you can learn from.
The volatility that exists in the cryptocurrency market makes it uncertain.
If there is a higher risk of losing your money then why should you invest?
The risk of cryptocurrency is not high when you know how the market reacts.
It is a 50/50 probability for making money and losing money.
When you know how the market operates and you trade in line with the market, your probability of making more money increases.
This year alone, cryptocurrency has produced millionaires.
Solana hit a new all time high, Ethereum hit a new all time high.
Bitcoin also made a drastic move that pushed the whole market.
In all these there are some people who rather than making money, lost their hard earned money.
The reasons are listed below as cryptocurrency investing mistakes to avoid.
- Buy high sell low
How do you intend to make money when you are buying at the top of the trend?
Note that there must always be a reversal of the market when the price is high.
So, buy when the price is low and sell when the price is high.
- Buying because it is cheap
This is a grave danger mistake in cryptocurrency investing.
You stand a chance of losing all your money.
Many people buy a particular cryptocurrency because they believe that the price is low and one day, the price will skyrocket.
Not all low price coins will give you a better return because the market does not respect emotion.
It respects adoption, forces of demand and supply and use case of each project.
Read more about how to do your own research here.
- Looking for 100x GEMS
Are you looking for a coin to buy which will give a mouth watering return.
Yes, there are such coins but they are very rare.
Mina hit a $500,000 market cap upon listing but such cases are very rare.
If you keep looking for 100x gems, you are bound to lose more money than you will gain.
- Using leverage
This is very simple but most people get it wrong.
Cryptocurrency is not a market where you will borrow funds and invest.
Start with whatever you have and trade while you learn how the market operates.
In cryptocurrency trading, future trading uses leverage which exposes you to more risk compared to your capital.
Understanding leverage in crypto trading will be a good idea.
- No Diversification
If you believe strongly in a particular project, you can keep buying and buying but don’t lose other opportunities due to your doggedness.
If you have more than one cryptocurrencies, profit in one can help reduce the impact of loss in the other.
What happens when your portfolio is based on one coin?
You will only make profit, if the coin rises above your buying price.
Managing your portfolio is a trading skill that you should have.
The fear and greed index is a good check for this.
Nevertheless, don’t buy any cryptocurrencies with more than what you can afford to lose.
While you are avoiding these mistakes, enjoy fast and seamless transactions with kurepay.