With the unprecedented growth of bitcoin value, the cryptocurrency sector is winning the minds of more and more people. Many of them a year ago did not even think about such concepts as cryptocurrency trading, cryptocurrency exchanges, blockchain technology and did not track bitcoin exchange rates online today. Despite all the outward attractiveness of the cryptocurrency market, it can be a challenge to enter it. Here are Top 5 tips for new cryptocurrency investors.
Study the subject
Bitcoin is an exciting new world, but it is complicated and confusing for those who got here on a wave of hype. Many people buy expensive cars without knowing how the engine works, and that’s okay, because if it breaks down, you can go to a car mechanic or a car service. In the world of cryptocurrency, you are alone against the whole world, and this world is decentralized and there is simply no one to support you. Therefore, first of all, beginning bitcoin investors should start with self-study of this topic.
Proceed with caution
Risk is an integral part of any investment and bitcoin investments are no exception. When planning their cryptocurrency investments, novice bitcoin investors should keep this in mind. The risk of investing in bitcoin is slightly higher compared to the risks of traditional regulated markets. This is due to the newness of cryptocurrencies in general and bitcoin in particular, their poor integration into everyday life, and the excessive volatility of cryptocurrency markets.
Bitcoin has shown a very impressive growth rate over the past few years, and new stories about bitcoin millionaires keep popping up in the media. While these stories may entice novice investors to invest all their money in bitcoin, they need to keep in mind that no professional investor would advise putting all your eggs in one basket.
Get ready for volatility
The cryptocurrency market is known for excessive volatility, which scares many traditional investors operating in regulated markets. A big drop in the price of bitcoin does not mean total disaster, but it is difficult to remain committed to an investment decision when returns are creeping into the red zone. There are several strategies investors can use to counteract the inevitable price fluctuations.
Keep coins in your wallets
The cryptocurrency industry still sees a lot of hacking and theft and so it’s important to take precautions. While exchanges are a great place to buy cryptocurrency, they may not be considered the best place to store it.Once you have bought cryptocurrency, transfer it from the exchange to a wallet that only you control, such as a hardware wallet.