With the recent revolution in digital technology, cryptocurrency investment has now become the latest trend in the financial market. This field of investment has drawn a lot of interest due to its rocket-like popularity.
On this page are three important tips that every crypto investor needs to be well accustomed with based on my experience and some of the common challenges and hurdles that I have encountered in this financial market as a digital currency trading expert. In most cases, individuals get into the market and purchase their preferred cryptocurrency with the expectations of making huge profits overnight, or its price maintaining a continuous rise, however, I must confess things don’t just happen like that, crypto trading isn’t a sort of magic.
This article seeks to provide three essential lessons targeting the area of cryptocurrency investment. These rules will enlighten you on purchasing and selling them when the price is favorable.
Rule 1: Don’t come in with life savings
Cryptocurrency can be a great venture but is not advisable to invest in the field with life-savings, as it could be risky, very risky. This reminds me of family who had sold their properties to invest in the most popular cryptocurrency; Bitcoin. At that time, the cryptocurrency was trading pretty high above $10, 000, wow, this is a good deal for anyone. Although, the family was inspired by how Bitcoin made an excellent run to trade at over $10, 000 from $2000 within a short period when making this bold decision. But this was an irrational decision to make. Well, some may argue that taking risks is part of the investment or any business, but it is essential to take only well calculated risks.
After selling their properties to invest in Bitcoin, the price of the digital asset dropped like a rocket returning from space, deeper and deeper causing them to make huge loses unexpectedly. Therefore, it is advisable to invest an amount that you can afford to lose regardless of how promising the price of the digital asset appears to be.
Rule 2: Price rises suddenly but not all the time, be patient.
As you may know, cryptocurrency price can rise at unimaginable magnitude despite the fact that the market which explain is high level of instability. However, it is good to mention that no investment scheme in the field can offer a 100 percent guarantee of huge returns overnight.
It may interest you to know that there have been seasons where experts in this field predicted sharp rise but sharp fall was the order of the day. John McAfee, the cryptocurrency expert, made a prediction that by mid-2018 a digital asset (Verge) would sell at $15. Instead, the Verge price dropped to $0.002.
Rule 3: Expect A Price Fall
It is good to have it at the back of your mind that prices can fall at any second but this shouldn’t be very serious issue if the above rules are adhered to. This will significantly help you decide on the amount that you can manage to risk for this investment. However, some of the newbies tend to overlook this lesson due to the excitement of the potential returns.
I have at several point advised and guided my friends into investing in cryptocurrency, one of the most common question is; “when will I become a millionaire?” Well, it might appear like a joke, but this is a question that dominates the minds of most cryptocurrency investors and it is a good one, as a matter of fact, I asked myself when I started. This makes them feel deceived and disappointed when they realize that the price of the digital asset is continuously falling or does not seem to make any movement.
Therefore, it is good to understand that there could be a downward spiral in market or a price fall when you place your money in any cryptocurrency. The digital asset market does not maintain a continuous rise throughout without a fall in price. This feature is prevalent in the history of even the most popular cryptocurrencies like Bitcoin. Nevertheless, it is good to know that the price of a given cryptocurrency can shoot up by twice the percent it fell.
