Some people think cryptocurrency is fake, and crypto exchange platforms are not secured. They also think you can lose a massive amount of money if you intend to invest. But if we focus and think carefully, we can quickly identify the growth of the cryptocurrency industry over the last few years. It is not easy to achieve the objectives if you do not know how to invest in cryptocurrency ideally. There are many digital currencies available out there besides Bitcoin and Altcoin. Each platform has specific pros and cons. From selecting the most suitable platform to invest your money, you must follow some rules to succeed.
Invest in Cryptocurrency: A Complete Guide
The concept of crypto trading is sophisticated. If you have decided to dive into the enormity of cryptocurrency, you must know about blockchain, what is bitcoin, how a miner works, and the rate of the available currencies. Here, this comprehensive tips will help you to invest in cryptocurrency successfully.
1. Do Not Invest Unless You Have Enough Money
Investing in cryptocurrency is not always profitable. As the price of digital currencies fluctuates frequently, it may take longer than you expected for enduring a revenue. You should invest only when you have enough capital and do not need this money to maintain a healthy life.
When Bitcoin faced a flat rate in 2018, investors had to wait for several months to make a profit out of their venture. Although you can withdraw your money at any time by having a loss, keeping patience can save you from amplitude your loss. Never try to invest by taking a loan and if you are not ready to lose.
2. Explore & Gain Enough Knowledge Before Investing Money
The concept of cryptocurrency is sophisticated and includes many aspects that are not familiar to maximum people. On the other hand, in many countries, it is a new idea and has not created much impact. So gather enough knowledge, ideas, and insights of some crypto trading platform before investing funds.
Moreover, if you don’t know how to invest in cryptocurrency, then how you will succeed? There is no need to become a pro in this sector to start investing. But you should focus on some specific things such as the minimum amount required to deposit, security issues, risk factors, current rates, and need to gain a transparent approach on how things work together. It is as much crucial as collecting information and documents before opening a new bank account.
3. Find the Diversifying Opportunities
If you want to invest, first try to find the opportunities and crypto industries where you want to invest. If you invest all of your free money in the same place, then the risk factor is pretty high. Plan on diversifying opportunities, if you do not want to incur a huge loss.
Enlighten yourself with the current rate of all the available cryptos. If you can invest money through different cryptocurrencies, it can protect you from terrible situations. Even if you experience loss in any platform, there will still be chances to turn around by making a profit from other cryptos.
4. Find Your Platform
There are many cryptocurrency exchange platforms around the world. These platforms are basically web frameworks that allow you to exchange your bitcoins with other digital assets. Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH) are the most popular cryptocurrencies.
Famous and already establishes cryptocurrency platforms offer fewer features but much more secure than the newer ones. But you can get the best rates and exclusive offers on the new platforms. Find the most suitable platform for you to start investing or buying bitcoins.
5. Conduct Your Research
Some cryptocurrencies are very successful, and there is nearly no chance of disrupting security in these projects. Most of the people follow some popular blogs or forums before starting an investment. Explore twitter and newspaper regularly to know the latest condition of the currencies.
Reddit is also an excellent platform for blogging and getting data from a massive crowd. Specialized discussion forum and telegram can bring light on this matter. But naturally, you will get the most information from Google. Crossmatch all the information, evaluate the sources, and judge the authenticity as well.
6. Be Aware of Fraudulent Activities
The platform of cryptocurrencies is not regulated by traditional controlling committees like central banks or stock exchanges. Again, several security disruptions and scamming are also reported in recent years. You have to be very cautious before any unwanted situation arises.
Study some of the reported security attacks and the latest trends as well. Before investing, try to ask questions to your consultancy firm as much as possible. Try to avoid unexpected high return offerings, emails, and double-check all the URLs to prevent phishing. Stick to well-known exchanges. Being self-confident and able to use common sense is also notable.
7. Find Experience & Trustworthy People
The industry of cryptocurrency has seen enormous growth in a short time, and the number of scammers has also increased rapidly. Again, if you do not have enough time to research, then you must find trustworthy and experienced people to help you in this matter.
Try to differentiate between genuine and fraud people. If you do not have enough expertise and familiarity, take help from others. Many individuals and companies provide service to direct you in the right way for earning revenue. Do not get tempted to the cheap one time or lifetime subscriptions. Instead, follow the footsteps of successful investors.
8. Analyze the Capitalization
If you only rely on the unit price of cryptos, then you may eventually incur a loss. If you want to discover the margin of the progress of any cryptocurrency, then you will need to focus on two factors.
Understanding of market cap is required to know the exact growth of any currency. Currency with a high market cap but less growth is more potential than a low market cap.
Besides, ICO is used to know the performance of any digital currency. If the value of a project has seen a fall since its ICO, then it may be identified as a scam. But again, if any crypto has already seen a lot of increment, then the chance of a further rise in the value of that particular crypto is minimum. You have to be extremely careful if you want to enter the market of cryptocurrency.
9. Track & Evaluate Result
You have to track the record of how your investment is performing regularly. If you invest your money, three things can occur. You can lose all of your money, or the amount of cash remains stable, or you can earn a profit. Analyze the results and dig deep into the reports to extract more meaningful information.
It is not often easy to check the result because of the complexity that is involved in crypto trading. But thanks to developers who have built intelligent applications to track the objectives and performance.
Blockfolio and Delta are the two most dominant mobile applications that are creating a significant impact. Monitor regularly and use the features of these advanced applications to get the best result and become a successful investor.
10. Ensure the Security of Your Cryptocurrency
Traditional law enforcers do not regulate the cryptocurrency market. Besides, this industry is increasing. These reasons are responsible for all the security issues that have been highlighted in the last few years. You have to be very cautious to prevent cheaters from attacking your assets.
Never stock your currencies online instead use specialized wallets for storing your wealth. Physical storehouse like Ledger Nano S is also available to enhance security. Do not ever take the risk of sharing your private keys with anyone. Also, maintain and design portfolios dedicated to specific crypto. Remain focus and explore the latest issues to keep updated.
11. Ignore the Noise
Some people may demotivate you by saying that cryptocurrency is nothing but an overhyped topic. In many countries, this concept is not familiar. Yet almost all the companies and major banks have launched projects to expand the amount of cryptocurrency exchange all around the world.
According to recent research, the cryptocurrency exchange volume is going to rise by 50% this year. So this is undoubtedly the most suitable time to start investing in cryptos to become a successful player in this game. Do not rely on other words and remain focused. If you decide to be an investor, avoid all noise, conduct your research, ask questions, take help from the experienced persons, and collect enough resources to justify your decision.
12. Do Not Follow the Trending Groups
There are many Facebook groups where so-called experienced leaders of this industry create hype by advising people on many aspects of this digital asset. You will find the shortest way to become successful, strategic suggestions, and many other lucrative issues in this group. But in most cases, the purpose is nothing but only to do their business and earn money from you.
The truth is successful investors do not have enough time to supervise you. Again the tactics that made them successful might not work for you. Prominent consultants will ask a tremendous amount of money, and you will be disappointed ultimately. So do not fund unless you have designed your approaches and set your intentions yet.
13. Know the Risks
The technologies involved in cryptocurrency is still young, and there are many risks which you must be aware of before investing. Volatility and frauds are prominent though the significant risk is in the blockchain technology that is responsible for ensuring the security of digital currencies.
The rate of a cryptocurrency fluctuates frequently and can drop even up to 80% in a year. So try to know all the prices in real-time. Stay away from lucrative offers and do not just follow anyone else. Again, you can not wholly rely on blockchain. Bugs can be identified anytime, but scammers will not wait for that day. So never invest if you are not confident and can not take the pressure if you lose the money somehow.
14. Know the Good Time
Many people hesitate about the ideal time to invest in cryptocurrency. The truth is there is no time which can be called the perfect time. The rate of cryptocurrency fluctuate much, and it is hard to predict a better time when you can get the highest return.
According to the statistics, February, March, and the second half of December are identified as the prime times for investing in cryptocurrency. This is called alt time and most of the cryptocurrencies rally in this time of a year. Tax period can also be a reason behind the high rate of altcoins during these months. So try to keep yourself up to date and choose the most suitable time for you before investing.
15. Know the Market
If you want to enter into a business, you have to research and identify the characteristics of a market. It can encourage you to open new doors and new opportunities. Before investing in cryptocurrency, you must study the market condition and try to identify the future of this industry.
The cryptocurrency business is still young. If you compare this market to other financial institutions or foreign exchanges, then you will recognize how small crypto industry even is. Market capitalization and trade volume suggest that there are many possibilities for the growth of cryptocurrency. So it will certainly enhance the value of the crypto market eventually.
16. Be Prepared for a Roller Coaster Ride
If you want to shine in the field of cryptocurrency, then you have to be mentally healthy and cope up with any situation. You will need to be sensible enough and handle every difficulty very professionally. There is no place for those who have a weak heart.
As it is a volatile market, a lot will depend on your expertise, skills, knowledge, and risk appetite. If you can not handle the pressure of 80% drop or (300-400)% rise, you will never be able to settle in this competitive market. If you lose your track only for once, it is tough to get back on the trail again. But if you are that person who wants to make a profit rapidly, then this place is not for you. You have to keep calm and patience to roll your career smoothly.
17. Set a Target First
You must understand how to invest in bitcoin before planning to engage a lot of funds. It is a relatively new industry. As a result, it is pretty tough to predict the right time or correct amount that should be invested. It is evident that you will lose money on some trades. But you have to have a target of winning or losing to remain in the cryptocurrency market.
Many people keep investing without knowing when to push back and what is the limit. But when you lose a significant amount of money, you will probably not be able to sustain. Bitcoin’s price fluctuates rapidly and can move up to 3% in a day. So you need to set a target even before investing in a new trade.
18. Take Preparation to Handle FOMO
If you are new and do not know how to invest in cryptocurrency, then it is obviously troublesome for you to handle the pressure. Many people can not manage the mental stress causing Fear Of Missing Out and end up losing all of their savings.
Never invest if you experience rapid growth as you may miss out the increased price of the chosen currency. If you already earn a profit, then wait for the price to drop. When the price is bottomed out, the rate of cryptocurrency will definitely go high again. Even the most experienced traders cannot track the decisive move in Bitcoin. So take preparation to handle FOMO before investing.
19. Know the Technology
Knowing the technology and the processes that are involved in a project are the basics that you should cover before diving into it. So you need to investigate all the tools, technologies, and also the role of miners.
Watch youtube videos, read trustable resources, and explore the branches also. You should never stop only after knowing how to invest in cryptocurrency. If you want to be an independent and refined investor, you should also concentrate on learning algorithms like consensus and pre-mining. Besides, technology is progressing every day. So keep up with it as much as you can.
20. Understand the Implications of Tax
You can start investing only after knowing how to invest in cryptocurrency. But if you want to make your journey smooth throughout the way, then you must know the process of tax implication, rules and regulations as well.
Many people think we need to pay tax only if we can generate revenue over our investment. But this is not the truth. Instead, you will need to pay tax to the government for each trade you make. Keep the exchange fees and the tax implications in mind while planning your strategies.
21. Enter into a Liquid Market
In cryptocurrency, Liquidity refers to the ability of crypto to be converted into real money or any other digital asset. It can also be compared to the real-life scenario like you have products but do not have buyers so that your products can get sold.
Liquidity is essential for making your journey successful in the crypto market. If you ever think the price of crypto will never rise or you urgently need money, then you can sell your crypto to fulfill your requirements in no time. But even if you have a considerable amount of least demanding cryptocurrency, then you will need to sell at a relatively low price to attract the buyers. And this will ultimately cause you a lot of money.
22. Conquer the Fear, Uncertainty, and Doubt
If you already know how to invest in cryptocurrency, then this is the time you should focus on improving mental health to conquer the fear, uncertainty, and doubt. If you ever fall for FUD, then you can miss valuable opportunities to attain success.
When the price of a cryptocurrency goes as high as possible, some sellers always try to manipulate or spread fake news. As they want to buy that particular crypto at a lower price, they start spreading the baseless message to create confusion and uncertainty around the online communities. Try to understand their motive and do not respond to these scammers. And most importantly, do not operate on impulse.
23. Use Logic Rather Than Emotion
This is a common problem in any business. Some people love to keep faith in whatever they have done. In business, even if they keep losing, they will like to consider that his/her investment will generate some revenue one day. But it is vital to use your logic prominently to create sales or value out of the investment.
Many traders have failed for believing too much in their struggles. If you see that your crypto has been delisted from the exchanges or deleted by the team members, you should immediately take action. If you can not manage to sell your asset at the right time due to irrational emotional attachment, then this market is not for you. And you will end up losing all of your money.
24. Know When to Disconnect from Crypto
Knowing how to invest in cryptocurrency is never enough if you want to overcome all the problems easily that will try to haunt you on the way to achieve your objectives. You have to be very patient and keep faith in yourself. In crypto industry, making money quickly is rare. So you will need to wait enough time before expecting a profit.
Sometimes remain relaxed is one of the most important things you should follow to attain your goals. After investing your money, you should do fun and take that amount as granted for losing. Do not panic; do not overthink. Do not let negativity get into you. So it is better to keep a distance from crypto for a while and take a break from all the hassles.
25. Know the Dynamics
If you know how to invest in bitcoin, then you must have heard that bitcoin covers almost 40%-50% of the liquid market. That means other altcoins are also profitable. If you know the market dynamics very well, you can generate a profit out of any crypto.
You have to understand the correlation between bitcoins and other altcoins. While the price of bitcoin increases sharply, the price of other coins remain stable or go down. Bitcoin’s dominance in the cryptocurrency industry is also notable. If the market crashes, the chance of falling price is relatively lower for bitcoin than other altcoins. In addition, when it comes to rising in the price, bitcoin grows gradually, and altcoin’s price depends on price.
26. Collect the Airdrops
Sometimes you can earn money with little or no effort. But you must remain attentive and focused. If you keep yourself updated and follow all the latest news, then the chances of getting airdrops increase. Airdrops can arrange the initial money for you to invest or start your journey in this industry.
Airdrops are gifts that are usually provided by new companies. This is a marketing technique used by many companies to raise awareness. It is also helpful to develop brand value. But you have to go through some steps to be eligible for collecting the reward. It is as simple as submitting a multistep or straightforward form, but the amount of reward is naturally always lucrative. If it is free and can add value, you should try to acquire it anyway.
27. Understand the Difference Between the Stock Exchange and Crypto Market
It is essential to know when you conduct research to learn how to invest in bitcoin that there is a significant difference between cryptocurrency and traditional stock markets. There are so many people who make this mistake by thinking that there is the same place.
A company can introduce crypto, and you can buy it. But you will never get any dividends and hold any position in that company. If a company performs well, the price of their crypto may still fall, and you can lose money. Only security tokens can grant ownership to the traders depending on the regulating terms. So before investing, you must know the distinctions and proceed further.
28. Never Consider Yourself Lucky
You can not expect to be a successful trader, only knowing how to invest in cryptocurrency. Instead, you will need some luck in this sector. Some people always love to consider themselves lucky enough and have an intention to overtrade. But this is not a dream, where everything goes according to your wish.
If you look at the reports or follow some of the popular communities, you will identify that even the most successful investors need some luck. Do not overtrade considering you are lucky. Never make sloppy mistakes. If you can 2x your investment, you can afford to lose up to 45% because you will gain in the long run. To be a great trader, you need to wait for a certain period of time in this space.
29. Do not Over Diversify
It is advised that you should invest your money to buy multiple cryptocurrencies at a time. Rather than engaging all the money in one bucket, you should try several digital currencies at a time to bring out the most of your investment. It is apparent that you will incur a loss if you are a first-timer in this space.
To minimize the amount of loss, then there is no alternative to investing at least ten cryptos at a time. But never overtrade or over diversify. Because after spending, you need to keep track of all the assets to evaluate the performance. If you fail to keep pace and lose track only for once, it will be tough for you to generate revenue.
30. How to Select a Project
You already know how to invest in cryptocurrency or what are the things you need to focus on being a great investor. But for investing, you need to select a project first. As this is the first thing, you need to be careful before making the next step. A project with a bright future can always generate profit while you can end up losing all the funds if you select a project that has a relatively poor outcome.
Try to identify the missions of the project. If a project has no mission, then it is less likely to become a profitable one. Find out the core team members and whether they have worked together previously or not. Besides, try to know and justify the date of launching the date when the crypto will going to be live in the market.
Cryptocurrency is going to replace the traditional currencies in the coming days. It uses strong financial security protocol for exchanging digital assets. If you want to start your journey in this space, you should start your journey immediately before this market becomes a blue ocean.
There are some commonly used rules that we have tried to focus that you should be maintaining. To know how to invest in cryptocurrency properly, you should start from the basics and then advance for more precise information. The concept of cryptocurrency is sophisticated, and you should not proceed before clearing all the terms.
Besides, there are many things you will need to explore to dig into more detail. To be a successful trader or investor, you must visit all the branches of cryptocurrency along with their insights. Start your journey, and do not forget the advice that has been described in this article.