According to Matt Davies Stockton, if you had bought just around 16 Bitcoins back in 2015, you would be a millionaire when Bitcoins and other cryptocurrencies were at their peak at the end of 2021. Let’s check out a few tips for starting with Bitcoin and Cryptocurrencies.
Tips & Tricks
- Go in with a strategy – Separating genuine cryptocurrencies from scams isn’t easy in the age of misinformation. Sharks and whales are waiting out there to take your money and shred you financially. When Bitcoin and other cryptos were at their peak in 2020 and 2021, crypto investment scams surged to an all-time high with an average loss of over $20,000 per victim.
So, when a cryptocurrency is hyped and is in the news a lot, take a step back and scrutinize it carefully. Look at the fundamentals of cryptocurrency. Figure out the real-world problems cryptocurrency solves or promises to solve. Figure out the number of users it has, and the share owned by founders and promoters. Avoid coins that promise the world and haven’t been able to provide any tangible benefit.
- Expect volatility and manage risks – If you thought penny stocks were volatile, you’re in for a big surprise when you enter the crypto market. Even the most reputed, strong, and widely adopted cryptocurrencies like Bitcoin were $60,000 a piece a few months ago. At the moment they are less than $20,000 apiece. Their price curve is a roller coaster with plenty of peaks and dips. So, expect volatility when you invest in the crypto market.
That’s why you need to manage risks carefully when you invest in the crypto market. Don’t invest a big chunk of your portfolio into cryptos. Make sure to only invest the amount you are prepared to lose. It’s a high-risk business where a majority of traders lose their money.
- Diversify your portfolio – Similar to investing in the stock exchange, you need to diversify your portfolio when you invest in the crypto market. Spread out your money among different cryptocurrencies. This way you have the flexibility to hedge your high-risk bets on meme coins like nitro dodge by also investing in relatively stronger and more stable coins like Ethereum and Bitcoin.
- Think long-term – Most traders in the crypto market and the stock market are gamblers. If you’re looking to trade in cryptos on a daily or monthly basis and reap profits, you’re throwing your money away. Even the most complex data analytics and AI-powered algorithms can’t predict all the factors that may affect the price of a cryptocurrency. That’s why you need to stay invested for the long term. Time in the market always beats timing the market.
Matt Davies Stockton suggests that you take the tips mentioned above into account and do your own research before investing in cryptocurrencies. They are volatile and some cryptocurrencies are straight-up cash grabs to make just the founders rich. Be patient and learn as much as you can about crypto before investing in it.