Cryptocurrency is the future of financial transactions and Investment. However, this has not always been the case. Cryptocurrencies saw their first boom in late 2017 when bitcoin hit USD 20,000 per coin. Since then, there have been many speculations on what will happen next with cryptos. One thing is sure, though: it’s time to invest in cryptocurrencies before they become mainstream!
This article discusses five crucial mistakes to avoid to avail higher returns on your Crypto Investment.
1. Selecting the Wrong type of Investment.
Crypto investors need to know what type of Investment they want to achieve their financial goals. The type of Investment can be divided into three categories:
-Long-term investments: This kind of Investment is meant for long-term goals. You can invest in older currencies such as bitcoin and Ethereum for these kinds of investments.
-Short-term investments: This kind of Investment is meant for short-term goals, to flip the currency as it gains more value. You can do this by investing in newer currencies such as USD coin, BNB coin, and Dogecoin.
2. Not doing proper research before investing in any coins or tokens
The most important thing that Crypto investors need to do before investing in any coins or tokens is to do proper research. If you have done appropriate research, there will be no chance of losing money because you know what to expect from your Investment. Failing to understand how the currency works, the idea behind it, the people involved, and the technology used for the development can turn your investments into dire losses.
3. Not having an exit strategy
If you’re not sure how to develop an exit strategy for your Crypto investment or how to implement it, then that is a big problem. You need to have an exit strategy before you start investing because if something goes wrong, your portfolio loses money. There are many ways of developing an exit strategy. Still, one good way is by setting up regular reviews with yourself and other people who have been successful with cryptocurrency trading.
4. Checking portfolio balance too often
When you check your portfolio balance, it’s easy to get frustrated and give up. But checking your portfolio balance too often can be a big mistake that will cost you big time. Many people check their portfolios every day or even multiple times daily. This mistake can be dreadful because it leads to emotional trading. When the markets go down or up, they get excited and sell or buy based on feelings rather than logic or facts (the reason we’ve been saying “emotionally driven”). Unfortunately for these investors, who are emotionally driven investors, this causes them to lose money instead of making any profit.
5. Following others without analyzing the data by yourself
Followers are not always the best investors. By following others, you may end up making the same mistakes that they did.
• Don’t follow the crowd – It is essential to avoid investing in companies that everyone else is buying because there is no way of knowing whether these will be suitable investments. By doing so, you will miss out on many opportunities and earn less money than if you had invested in a company based on its fundamentals alone.
• Don’t fret over price movements – When we see an increase in prices, it often means that demand has increased too, which makes things even more attractive for investors who want to make profits from their investments but do not wish to lose any amount after paying initial capital cost; however our emotions can get us into trouble sometimes as we tend to worry about what happens next rather than focusing on whether this particular strategy works out well enough for us financially (or vice versa).
Conclusion
Crypto is a very new technology with many challenges ahead of itself. We’ve seen how the world has responded to this new technology, but as we move forward, I hope that more people become aware of these mistakes and avoid them. We recommend the bitcoin circuit if you want to invest in the Crypto market. It provides secure and reliant crypto exchange facilities for multiple cryptocurrencies.
