The COVID-19 pandemic has had so many negative effects on the world. For one, many companies had to shut down and declare bankruptcies due to the mandate to stay at home so as to prevent the spread of the virus. The stock market then crashed as a result.
However, like many other companies that boomed during the global crisis, such as manufacturers of medical supplies and alcohol and online stores, the cryptocurrency market rapidly expanded as people all over the world were in search of more lucrative forms of investment without having to leave their houses.
While many were skeptical at first, what with news of various controversies and scams involving digital currencies circulating the web, some still took the risk and ended up getting rich. Stories like this spread like wildfire and the niche of investing in cryptocurrency have grown to what it is now, with over 10,000 different cryptocurrencies available in the market.
Even with the popularity of digital currencies as a form of investment, there are still first-timers out there who are just beginning to dip their feet in high-risk, high-return assets. Here are some valuable tips to keep in mind before diving into the world of cryptocurrency investment.
Research, research, and more research. Just like in any other form of investment, research is key when investing in cryptocurrency as a beginner. This is the first step that anyone should do. Learning about cryptocurrencies and their many facets is a must before diving into this lucrative world.
In researching, look up reliable digital currency exchanges that will be used for buying and selling cryptocurrencies. Ensure that they have the fiat and cryptocurrency pairs so there will be no problem converting them to cash in the future.
Next up, a digital wallet is a must when investing in cryptocurrency, which is used for storing digital currencies. Some wallets also have the ability to convert to fiat and have the feature to transfer directly to bank accounts. It is important to know what exactly one wants to do with cryptocurrencies in order to facilitate faster and cheaper transactions.
Start small. Many who have lost a lot in cryptocurrencies are those who did not do some studying first before jumping headfirst into cryptocurrency trading and spending a huge amount of money. It is highly advised to start small first. One can slowly increase the amount being invested as one becomes more knowledgeable and experienced.
Also, ensure that the money being used for the investment is money that one can afford to lose. Investing in cryptocurrency is a high-risk investment, and being careful with money as a beginner would mitigate potential losses.
Diversify. Do not go all-out on just one cryptocurrency. Invest in several to spread out losses in case of a crash in prices. Diversifying is crucial in gaining firsthand experience when it comes to cryptocurrency trading. There are also other types of digital assets, such as NFTs and Stablecoins, that can further diversify an investment portfolio.
There is a high probability that a family member, friend, or co-worker is into cryptocurrency investments. Ask them and learn from their mistakes. Remember to know when to keep and sell cryptocurrencies. As long as the asset is in a non-custodial digital wallet, there are no losses incurred yet. One can always wait for the price to rise in order to make a profit or just break even when necessary.
Do not forget that there are many out there who want to scam people of their hard-earned money. Do not be excited to get rich fast, be extra cautious and research a lot before investing in cryptocurrency.
Author: Makkie Maclang