When it comes to cryptocurrency investing people have to take into account that this very volatile market is not for the weak-hearted. On the other hand, this market has matured a lot and has all the properties a regular market (like Forex) has, which is market cycles. Still, there is just one thing which makes the cryptocurrency market unique and that’s regulation or to clarify; the lack of regulation.
As a result, anyone can launch a new cryptocurrency and put it into the markets. This open character of the market could bring the lucky ones big profits, but there are also lots of investors suffering from big losses. If you are planning to join this game but haven’t started yet, you are on the right spot. In this article, 7 takeaways for being profitable when investing in the cryptocurrency markets without losing it all(this is what happens most!).
1. #DYOR:Do your own research
Before you start buying into coins, it’s very important to do your own research. There are several ways to do this but a good place to begin with is Coinmarketcap. This website gives in a glimpse a total overview of the current market and has hyperlinks to every coin out there. Also, do some research into the technology of blockchain networks. A good place to go to is Blockchain.com. This site gives a deeper insight into this network and has an interesting graph’s about current transactions and network statistics.
When you are feeling more confident about this market and corresponding technology, it’s time to find the best online platform to start buying some cryptocurrency. So when you’re new to this or do not have much experience in this environment all possible online trading platforms out there could be a little bit overwhelming. Don’t worry too much about that. Currently, the biggest and most reliable exchanges out there are Binance or Coinbase. Both platforms have the highest daily volumes and are proven to be secure over time. Here is a good comparison of Binance and Coinbase.
2. #Be Cool:Avoid any emotions
Most starting investors who are entering the markets, came to this place because they read some success stories on social media about getting rich in just 24 hours. Of course, these stories exist but if you are entering these markets and expecting the same, I have to disappoint you. It just doesn’t work this way, although not anymore. In other words, investing in cryptocurrency isn’t a get rich quick scheme.
If you want 5x-10x results(which is still possible) it takes discipline and patience. To do this, stick to your plan and don’t get distracted at results of other investors in the community. Give the developers of your favorite coin some time and participate in their community by joining their Telegram or Slack channel.
3. #Learn: Invest time to know the fundamentals
So now that you have invested in some coins it’s time to do some homework. Most cryptocurrency investors who are successful are just playing the ‘HODL’ game. It’s proven that this kind of investment strategy is the best, but it takes time! HODLING is a slang in the cryptocurrency community which means not to sell for a quick profit but hold on to your investment. If you are planning to do this, you have plenty of time left.
Next, you can use this time to learn the fundamentals by for example deep diving in the mother of all cryptocurrencies which is Bitcoin. A good place to start is reading the Bitcoin whitepaper and learn more about Blockchain technology. It’s just a win-win because you are turning in an expert now, which gives you the possibility to evaluate other interesting altcoins.
4. #Be responsible: Don’t depend on others when making decisions
Like I mentioned earlier in this article, a lot of starting investors are entering the crypto markets based on others ‘most lousy’ opinions. This is a big risk and also lacks responsibility. You have to take into account that most investors are in it for their own profit and not really care about other investors.
In other words, if you put money in the market based upon someone else’s opinion but getting REKT instead it’s still your responsibility. You can blame the other person, but it’s you who did the investing with your money in the first place. Your money always comes first!
Of course, it’s a good thing if another crypto investor wants to help you and give some guidance so you shouldn’t start to ignore it. Just remember that it’s your money and you are the one to blame.
5. #No Debts: Invest with money you can afford to lose
Don’t expect that profits are guaranteed when you first enter these volatile markets. It’s not! There are plenty of examples of investors who took a loan or sold their property during the ATH of the entire crypto market back in 2017. They could be in deep trouble right now because the markets haven’t recovered yet. What to do if you need the money, but it’s all in the cryptocurrency markets?
Another good example is the many Youtube videos that suddenly appeared online during the bull-market back in 2017-2018. The business model of Youtube channels is that the videos with the most views will rank high. As a result, content creators try to join the hype and clickbait you with headlines like “How I made 25K in Bitcoin in just a few weeks”. If you invested big on that kind of advice big chance you got into trouble.
6. #Be an outsider: Don’t get too involved
It’s very wise to do some proper research into the coins before investing some money into the project. But don’t get too involved. I’m pretty sure the people in the slack or telegram channel are helpful and nice, which is a good thing. The one big mistake when doing this is that you shouldn’t be too emotionally attached. Also, don’t invest all of your money in just one project this is still very risky!
Being successful when starting investing in Bitcoin for example, also depends on the choices you are willing to make. If you are too involved in some project you will miss out on the disrupting opportunities of the other ones. In other words, keep an open mind and stay focused on overall trends in the markets.
7. #HODL: Keep the horizon on the long term
Being successful in the cryptocurrency markets are mostly the crypto investors who got in early and hold on to their investment for a few years. But isn’t it too late for crypto investing? In my opinion, it’s certainly not. I think the cryptocurrency markets and corresponding Blockchain technology still has a long way to go.
One can compare this technology with the introduction of the internet and e-mail which lasted 15 years before really taking off. The big money is really in holding on long term(1 to 5 years) which isn’t any different from a corporate company start-up trying to conquer the market.
Finally, some motivational words about investing in cryptocurrency. Bitcoin doesn’t care what color you are, what religion you have, what your age is, or gender. Happy investing!