If you are new to cryptocurrency, you might want to learn the basics of crypto trading before getting into the game. A range of investment platforms will lure you to invest your money into cryptocurrency, but as seen from consumer reviews left on PissedConsumer.com, there’s no such thing as a free lunch.
To help young crypto enthusiasts shed light on the blockchain world, we asked five crypto experts to share their top tips and tricks with cryptocurrency and trading.
- What to consider before investing in crypto?
- How to choose cryptocurrency for investing?
- How to buy cryptocurrency?
- Red flags and mistakes with crypto platforms
- Crypto investing strategies
Below we introduce cryptocurrency experts and their best crypto advice:
What Should You Consider Before Investing in Crypto?
There are exchanges where you can buy crypto with your normal fiat currency and the ones where you buy crypto with crypto. As a beginner, you will see yourself interacting with the fiat-to-crypto exchanges more.
Please make sure that you do your KYC properly so that your experience is as painless as possible.
Just because your friend invested in DOGE, doesn’t mean that you have to as well. Please research and read about the projects. Watch some review videos or just check out their team and community. More often than not most people just blindly invest in projects without doing their basic due diligence.
Understand how wallets work. Make sure that you are sending your crypto to the correct address. For example, you can’t send Bitcoin to an Ethereum address and vice-versa. Keep in mind that crypto transactions are irreversible, once it's done, it's done.
How to Choose Cryptocurrency for Investing?
...my core three criteria for beginners that want to invest in cryptocurrencies, consist of coin utility, availability of project and team information, and project feasibility and status.
These criteria ensure beginners make decisions based on logic not impulse when stepping into the world of cryptocurrency investment.
Coin Utility — Think about the valid and long-term use of the coin. Will there be a demand for the ownership and/or use of the coin? Do you want to invest in ‘special-purpose’ or ‘general-purpose’ tokens?
Cryptocurrencies such as BitCoin, are general-purpose coins that can be used across several blockchains to purchase a wide range of unrelated products. It is up to beginner investors to determine which type you have more faith in; special or general use coins. The key here is ensuring that there is a utility and long-term use for that cryptocurrency.
Founder and Development Team Information — Next, we want to look at the availability of information about the founders and core development team. It is widely believed that the vast majority of cryptocurrencies (and alt-coins) are either scams or are fraudulent in nature. In doing research to increase faith in a particular coin, the availability of key information is important as people are very reluctant to include key contact information if their project is not legitimate. Valid projects should have several active communities on platforms such as Discord, Twitter, Telegraph, and Facebook.
Project Feasibility and Milestone Status — The final criterion that can be used to help beginners in the decision-making process is related to the feasibility and progress of the project. This criterion is a little more difficult to determine as in some cases that project details and plans might be very technical in nature and hard to understand.
It is still important to read the whitepapers of a few different projects to ensure the content is original. (Cut and pasted sections from another project are red flags.) In addition to the whitepaper, there should be a project timeline that is actively being updated.
Other Things to Consider — Availability of the specific coin on various cryptocurrency exchange platforms, partnerships with complementary organizations, and the ease of purchase, withdrawal, and conversion back to fiat (cash).
How to Buy Cryptocurrency?
Only invest what you’re willing to lose and never do it emotionally.
Beginners looking to enter the world of crypto need to remember a few things before they throw their wallets to the wind:
Crypto is a young industry — For instance, the first stock short reportedly occurred in 1609, and more than 400 years later GME and AMC shorting is still under regulatory investigation. If it has taken “established” financial systems more than 400 years to figure things out, it is safe to assume crypto still has a rocky road ahead.
Don’t FOMO buy — Folks in crypto will warn you to “only invest what you’re willing to lose,” but I like to take it a step further. Only invest what you’re willing to lose and never do it emotionally. FOMO (Fear of Missing Out) purchases are almost always emotionally driven — take a deep breath and count to 100 before purchasing.
Pay the extra fees — If you’re new, stick to established channels that offer support. Yes, there are exchanges that are cheaper than Coinbase, but it doesn’t matter if you save 3% in fees if you get hit by price slippage or transfer your crypto out to the wrong wallet. Learn the ropes in a relatively safe space, buy some BTC and hold it for a few weeks - let the thrill of the volatility come and go.
Red Flags and Mistakes with Cryptocurrency Investment Platforms
The beauty of crypto is that it always carries the potential to surprise investors with massive gains.
Never make investment decisions based on what social media trends suggest you to do. While certain billionaires can share memes and crypto commentaries online, it is important to not mistake them for financial advice. I also see a lot of beginners make this classic mistake where they start their crypto investments based on what their friends or communities are into. It is ALWAYS important to research about the crypto you are considering to buy since it can give you an understanding of your long-term gains.
Never rush to sell your coins on a bad day in the market. The beauty of crypto is that it always carries the potential to surprise investors with massive gains. If you are running on a loss, then consider holding onto your coins until they start to look better. Another tip would be to diversify your portfolio with your investments divided into Bitcoin and other promising Altcoin projects. This will ensure that your overall investments remain strong.
It is very important to remember this quote when it comes to crypto investments: “If something seems too good to be true, it probably is.” While crypto has made millionaires out of early investors, it has also led to numerous instances of scams where people have deposited their money on fraudulent projects with the expectations of high returns.
As an investor, it is important to always research about the investment platform you are considering to use as well as look for credible online news reports that have mentioned them. Since crypto is a developing industry, some fraudulent platforms tend to take advantage of that and use complex words and fancy-sounding technologies to describe their investment schemes.
It is always advised to stick to the terms you know and to keep reading up about new technologies and financial products from credible media agencies.
What Are the Best Crypto Investing Strategies?
Buying crypto these days is very easy, however investment decisions (just like regular investment) come in many forms, and there are a plethora of successful-to-moderately successful strategies.
We can take a deep dive into various customer profiles, and how they typically behave on crypto investments. Essentially, what investors need to figure out is whether they are in it for short-term gains (these would be a speculative-type investment), or they truly believe in the technology and the solution (Blockchain and the variety of coins) and are more interested in the long-term potential of digital finance. These are two very different approaches that then fork into a branch of varying investment strategies.
General red flags include:
- filtering out all the crypto pyramid schemes;
- not falling for FOMO & FUD-induced collective psychoses;
- not doing your research and following whatever the hivemind proposes at that time.
But clearly, if you imagine the world of Wall Street, quants, and the elaborate trading algorithms and strategies that are involved - you understand the complexity of crypto investment.
Cryptocurrency offers an exciting opportunity to grow profits, but you better be prepared for the unexpected turns along the way. We thank our cryptocurrency experts for sharing their top tips with beginners and hope their advice will help you make informed decisions.
Examine everything before investing your hard-earned money. Share your thoughts and tips on cryptocurrency in the comments below. If you have a story to tell, you are welcome to write a review on our platform.
- buy crypto
- crypto investments
- crypto trading
- cryptocurrency exchange
- cryptocurrency investing
1. While every effort has been made to ensure the accuracy of this publication, it is not intended to provide any legal, medical, accounting, investment or any other professional advice as individual cases may vary and should be discussed with a corresponding expert and/or an attorney.
2. All or some image copyright belongs to the original owner(s). No copyright infringement intended.