Cryptocurrencies are all the rage right now. If you're thinking of investing in them, it's important to know the rules to help you have a successful investment. This blog post will discuss the crypto rules that you must follow if you want to make money with cryptocurrencies.
Let's take a look at these rules.
Do your research in advance
This is probably the most important rule of all when investing in cryptocurrencies. Doing your research is key, as there are many different projects and coins out there. Trying to learn about every one of them is practically impossible, so you need to focus on what's important to you.
What does this coin do? Who is behind it? What is the roadmap? These are just a few things you should be asking yourself before investing in any cryptocurrency. Bitcoin Up is the best exchange platform with the best features you may want in a trading platform.
Don't fall on the hype
When a cryptocurrency/project is new and just starting, it's easy to fall into the hype of "the next big thing". Just because something is 'new' doesn't mean that it will become popular. If you see mass adoption right away, it can also be a sign of some scam action - scammers will often buy a lot of coins right away to create the illusion that it's popular.
So, before you invest in anything new, do your research and make sure there's demand for the coin/project.
Be Ready for Volatility
Cryptocurrency is a highly volatile asset class. When the price of Bitcoin rises by $1000, it gains more than 30% from its previous value, and when it falls by $500, it loses about 15%. All digital currencies are known for their high volatility compared to traditional assets like stocks or bonds. So be ready for that as you step into this new world.
If you want stable returns without much risk, then crypto-investing may not be your cup of tea. But if you don’t mind taking risks, there can be no better investment option in the present market scenario, which has huge growth potentials with significant risk.
Invest only that much you can lose
When you invest in crypto, invest only that much you are ready to lose. Cryptocurrencies are highly volatile and risky assets; therefore, it’s better not to put all your eggs in one basket. If you have invested a small amount in case of a sudden price fall or scam, it won’t affect your finances significantly.
Don't think of short- term investment with crypto
You must follow this golden rule whenever you trade with crypto. As an investor, if you have bought Bitcoin or any other currency at high prices and want to sell them after the market downfalls, it’s not a good practice, and this can only bring losses to your portfolio. So don’t think of short-term investment as this will definitely result in losses and make your portfolio empty for some time as well.
The Bottom Line
There are a few key things to remember when investing in crypto: do your research, stay patient, and don't invest more than you're willing to lose. If you follow these simple rules, you'll be on your way to successful crypto investment.