You’ve been noticing that Bitcoin and cryptocurrency markets are exploding at the moment and you want in on the action. That’s great, and now could indeed be a great time to invest. But you should know that making money on the crypto markets is not as easy as it seems. Crypto is a very complicated asset, and even people that have been trading for years still don’t fully understand it. This is why you will need to study them before you start trading and avoid some of the mistakes so many beginners make. Here are some examples.
Only Caring about Bitcoin
This is one of the biggest mistakes you can make when you start trading crypto. There are so many other coins out there, and some of them have so much more potential for growth than Bitcoin, so we would suggest that you start learning about altcoins and have a healthy mix of cryptocurrencies in your portfolio.
Some of the notable altcoins you could check out include Ethereum, Litecoin, Monero, Cardano, and XRP. You can also look at more experimental projects like Solana. When picking an altcoin, look at things such as market cap, recent movements, and also the people behind the project. You need to understand what the coin is trying to accomplish too. If a coin has a proven use case, a great team behind it, and it hasn’t exploded yet, you might have a winner.
Leaving their Coins on an Exchange
This is a horrible mistake to make, and if you leave money on any exchange instead of using a personal wallet, you’re asking for trouble. Don’t assume that exchanges are safe or that you’ll have recourse if one of them disappears. Crypto exchanges are very loosely regulated, and if one gets hacked or vanishes off the map, you may end up losing your money forever.
If you’re serious about trading, you have to get yourself a good Bitcoin Wallet. You can choose a cold wallet that will resemble a USB key or pick a software wallet. Both of these have their pros and cons, so study them in detail before you make your decision.
Putting all Your Money in Crypto
Cryptocurrencies are still largely unproven and they aren’t massively accepted. Putting all your money in crypto is a bad idea for many reasons. For one, cryptocurrencies are a very fragile asset. You could literally lose all your money if you lose a cold wallet or a device with a software wallet installed. Second, we simply don’t know what will happen with crypto in the future and all it would take would be one catastrophic event to tank them.
Some experts, including Mark Cuban, advise that you don’t invest more than 10% of your assets in cryptocurrencies. You don’t have to go that low, but you shouldn’t invest much more of your assets in crypto if you want to stay safe.
If you want to be successful over the long term as a crypto investor, avoid these mistakes. You should also take your time and learn as much as you can about cryptocurrencies and the crypto market before getting started.