Do you want to invest in cryptocurrencies? You will have to take into account several criteria before placing your money. If you do this without thinking, then you simply risk losing your investment.
The world of cryptocurrencies is vast. It does not stop at Bitcoin or Blockchain. You will need to train a minimum and use common sense to hope to grow your investments.
Through these various tips, we will guide you step by step to make your first investments. Let’s look in detail at all the important points that will need to be paid attention before depositing your money to buy cryptocurrency.
1. Only invest money that you can lose
One of our first tips is about investing in cryptocurrency: you only need to invest money that you are willing to lose. It must be money you do not need in your day-to-day life. If you ever lose that money, it should not affect your life. Never put the last 300 euros that would remain in your bank account. Do not make a consumer loan to invest. You are the only master of your decisions, but these tips are not to be taken lightly.
Investing in cryptocurrency sometimes requires being very patient. The price of Bitcoin and Cryptocurrency is reputed to be very volatile. But this is not always true, the curve of Bitcoin is for example very flat in the second half of 2018 … So, you can make gains/losses as fast, as your wallet stagnates for several months.
In case the market is not looking good, getting a return on investment can be longer than expected. You will then inevitably go through a phase of losses. If you ever need this money to live, here’s what it can cause:
- You will withdraw your investment by having made a dry loss.
- Your morale may be heavily impacted in your everyday life.
- You will try to redo you by doing irrational things and you will amplify your losses.
So, you only have to bet money that you can afford to lose. In this way, you stay away from your investment and do not act under the influence of emotion. The negative effects just mentioned will, therefore, be much less likely to occur.
2. Study the subject beforehand
As a second tip, we suggest you train a minimum before thinking about investing money in cryptocurrency. Even if several people have advised you to deposit money, do you really want to invest in a subject that you do not know at all? Do you blindly trust people without doing due diligence?
To make an analogy with other more traditional investments, here are some examples:
- Would you be willing to buy an apartment or house without visiting it?
- Would you buy a used car without the papers?
- Would you take an annual gym membership without looking at what it looks like and what services it offers?
If the answer to these questions is no, then you should also educate yourself about cryptos before investing your money.
Obviously, there is no question of becoming an expert cryptocurrency before starting to invest. But give yourself time to understand in broad terms how the environment. For this, you can browse our site, many free articles are there to help you as much as possible to better control the subject 🙂
3. Diversify your investments
After our first two pre-investment tips, our third tip will focus on diversification. This concept is important in many aspects of your life and it is also valid for crypto-currencies.
If you have money to invest, you must know the saying that you should not put all your eggs in one basket. In case your basket falls to the ground, you break all your eggs and you lose everything. If you had 10 eggs divided evenly into 5 baskets, then you would have lost only 2 eggs.
It is, therefore, appropriate to apply similar reasoning for your investments. You should divide them as follows:
· Some in real estate.
· Others on actions.
· Part in the crypto-currencies.
In the same way, the part concerning your investment will also have to follow this principle. It will be necessary to diversify your investment through different cryptocurrency. The goal is to reduce the risk to the maximum.
4. Inter-exchange transfers
Did you follow our first 3 tips? Great! You will now be able to start buying your first cryptocurrency! For this, we advise you to use the cryptocurrency platform.
This platform allows you to buy very popular cryptocurrencies such as BTC or ETH. To buy other crypto-currencies that are less popular but with greater growth potential, you will need to transfer your Ethereum and Bitcoin to so-called exchanges.
The exchanges are platforms where you can exchange your bitcoins against crypto-currencies that we call altcoin.
5. DYOR (Do Your Own Research)
Investing in the top 10 crypto-currencies is never a big mistake. Investing in some of these cryptocurrency is also a guarantee of security.
What interests us here is how to invest in cryptocurrency with less capitalization. Altcoins, there are about 2,000. While some projects have enormous potential for growth, others are either scams or projects that are destined to disappear. It will, therefore, be necessary to be particularly vigilant before investing in one of them.
Our fifth tip is a very popular adage in the crypto world: DYOR! This comes from the English “ Do Your Own Research “ and means you have to do your own research before investing in a project. Never invest on the advice of people you do not know (having read a message on a forum for example).
To analyze in depth a cryptocurrency that interests you, here are the different media that you can use:
- Reading the white paper
- Specialized discussion forum
- Using Twitter
- Join Telegram, Discord or Skype
- Google Searches- Find Online Reviews, Reddit, Steemit, etc.
It is important to be well informed so that you can form your own opinion about a cryptocurrency. Do not hesitate to take your time before investing in a project. It is better to miss a good opportunity from time to time than to go headlong into projects that will make you lose money.