5 Things New Crypto Investors Should Know

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Crypto investing can be a rollercoaster ride, but without risk, there are no profits.

According to research by Insider Intelligence, analysts predict nearly 40 million US citizens will own cryptocurrencies in 2023.

So, what do you need to consider when buying cryptocurrencies?

1. Perseverance pays off

Cryptocurrencies are the youngest store of value in the world, so it is very volatile. Even if you have already invested in shares, you still don’t know what crypto’s ups and downs are. For example, on Nov 10, 2021 Bitcoin (BTC) was at a new high of an incredible $68,789.63, 6 months later it has lost 54%.

Of course, it can also go the other way, but you have to be aware that when Bitcoin dip, you shouldn’t panic. It happens about every 4 years that the cryptocurrency corrects by about 50% or more. In 2017 Bitcoin fell from $19,000 to $3,800 and in 2014 from $1,150 to $200.

So keep calm and hodl, the most important thing is your time horizon. Anyone who has hodl Bitcoin for at least 4 years is in profit.

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2. Understand where the smart money is going

In the crypto space it’s important not to follow the crowd and instead to be anti-cyclical. That means when people get greedy you get cautious and when people get fearful you buy.

Two excellent tools to find this out are the Fear & Greed Index, where you can see how the mood in the market is right now. And the Altcoin Season Index, where you can see, whether you should rather have safe coins like Bitcoin and Ethereum in your portfolio or if you should take a bit more risk with alternative coins.

3. Research is everything

Trust is a good thing, but control is a better one. There is a lot of fraud in the crypto space, from fake coins to phishing sites, everything is there. If you want to buy a specific coin DYOR, don’t just search the site in your browser, instead use CoinMarketCap, it’s the wikipedia of cryptocurrencies and avoid scams that way.

Another tip is not to gather your information from just one source, make up your own mind and rarely listen to others.

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4. There is more than Bitcoin

As mentioned earlier with the altcoins, you’ve noticed there’s more than just Bitcoin, you may have heard of Ethereum (ETH). Bitcoin is only an asset, Ethereum can do more.

Called Smart Contracts, where it is possible to enter into a contract with each other without the need for a third party to authenticate it, because it happens in the blockchain. For example, a person can exchange one coin for another without the need for a central third party to make sure it’s done right.

5. Don’t be afraid to make mistakes

Finally, Bitcoin is a very small market, so don’t beat yourself up if things don’t go as planned. The two number one rule should be, don’t sell at a loss and only invest in projects you understand and support.

Invest only what you are willing to lose, so that in case of an emergency you don’t go bankrupt.

It’s best to make a savings plan and do Dollar-Cost Averaging, as long as you are aware of the risks. The Cryptomarket is a journey like any other investment in the world. And if something goes wrong, learn from it and don’t make the same mistake twice.