What are the things to consider before investing in cryptos?
Do you want to invest in cryptocurrencies? You will need to consider several criteria before investing your money. If you do this without thinking, you may simply lose your investment.
The world of cryptocurrencies is vast. It doesn’t stop at Bitcoin (BTC) or Blockchains. You will have to train a minimum and use common sense to hope to grow your investments.
Through these different tips, we will guide you step by step to make your first investments. Let’s take a detailed look at all the important points that you will need to pay attention to before depositing your money to buy cryptocurrencies.
One of our first tips is about investing in cryptocurrency: you should only invest the money you are willing to lose. It must be money that you don’t need in your daily life. If you ever lose that money, it shouldn’t affect your life. Never put the last 300 euros that would remain in your bank account. Don’t make a consumer loan to invest. You are the sole master of your decisions, but these tips are not to be taken lightly.
Investing in cryptocurrencies sometimes requires being very patient. The price of Bitcoin and cryptocurrencies is known to be very volatile. But this is not always true, the Curve of Bitcoin is for example very flat in the second half of 2018… Thus, you can make gains/losses as quickly, as your portfolio stagnates for several months.
In case the market is not doing well, the return on investment may be longer than expected. You will then inevitably go through a phase of losses. If you ever need this money to live, here’s what it can entail:
You will withdraw your investment having made a dry loss.
Your morale can be greatly affected in your daily life.
You will try to remake yourself by doing irrational things and you will amplify your losses.
So you only have to bet on money that you can afford to lose. This way, you stay away from your investment and do not act under the influence of emotion. The negative effects we have just mentioned will therefore be much less likely to occur.
As a second tip, we suggest that you train a minimum before thinking about investing money in cryptocurrencies. Even though several people have advised you to deposit money, do you really want to invest in a topic you don’t know at all? Do you blindly trust people without due diligence?
To make an analogy with other more traditional investments, here are some examples:
Would you be willing to buy an apartment or house without visiting it?
Would you buy a used car without the papers?
Would you be willing to take an annual gym membership without looking at what it looks like and what services it offers?
If the answer to these questions is no, then you should also learn about cryptos before investing your money.
Obviously, there is no question of becoming an expert in crypto-currencies before starting to invest. But give yourself time to understand in general terms how the environment. For this, you can browse our site, many articles are there to help you as much as possible to better master the subject 🙂
After our first two pre-investment tips, our third tip will focus on diversification. This concept is important in many aspects of your life and it is also valid for cryptocurrencies.
If you have money to invest, you need to know the adage that you shouldn’t put all your eggs in one basket. If your basket falls to the ground, you break all your eggs and lose everything. If you had 10 eggs evenly distributed in 5 baskets, you would have lost only 2 eggs.
It is therefore appropriate to apply similar reasoning for your investments. You should divide them as follows:
Some in real estate.
Others in stocks (or ETFs)
A part in crypto-currencies.
In the same way, the part concerning your investment will also have to follow this principle. It will be necessary to diversify your investment through different cryptocurrencies. The goal is to reduce the risk as much as possible.
Did you follow our first 3 tips? Super! You will now be able to start buying your first cryptocurrency! For this, we advise you to use the platform of crypto-currencies like CoinMetro.
This platform allows you to buy very popular cryptocurrencies such as BTC or ETH. To buy other cryptocurrencies that are less popular but with greater growth potential, you will need to transfer your Ethereum and Bitcoin to so-called “exchange” exchanges.
Exchanges are platforms where you can exchange your bitcoins for cryptocurrencies that we call altcoin.
Investing in the top 10 cryptocurrencies is never a big mistake. Investing in some of these cryptocurrencies is also a guarantee of security.
What interests us here is how to invest in cryptocurrencies with less capitalization. Altcoins, there are about 2,000. While some projects have huge growth potential, others are either scams or projects destined to disappear. It will therefore be necessary to be particularly vigilant before investing in one of them.
Our fifth tip is a very popular adage in the world of cryptography: DYOR! This comes from the English “Do Your Own Research” and means that you have to do your own research before investing in a project. Never invest in the advice of people you don’t know (having read a message on a forum for example).
To analyze in depth a crypto-currencies that interests you, here are the different media you can use:
Reading the white paper
Specialized discussion forum
Use of Twitter
Join Telegram, Discord or Skype
Google: find reviews online, Reddit, Steemit, etc…
It is important to be well informed so that you can make up your own mind about a cryptocurrency. Feel free to take your time before investing in a project. It’s better to miss a good opportunity from time to time than to jump headlong into projects that will make you lose money.
Our 6th tip concerns all the scams that exist in the world of crypto-currencies. We must be particularly vigilant about this and avoid them as much as possible.
Our 7th tip is to find reliable people who can help you with your investments.
Some people don’t necessarily want to spend hours analyzing a project or simply don’t have the time to do so. There is then the possibility of following experienced people who can advise you. However, one must be vigilant and choose these people carefully. The environment is filled with fraudsters or people who only want to manipulate the courses to their advantage.
Here are some tips for detecting if a person is potentially trustworthy:
Seriousness and rigor
The modesty of the person