It’s incredibly easy to buy crypto in 2023. All you need is to
- Buy a cryptocurrency exchange
- Sign up
- Deposit funds
- Place an order
Sure, the procedure is simple, but so is buying property or stocks. The key lies in securing the funds and, above else, knowing what to buy and how to interpret the market.
So, to rectify this mistake, here are five things they never tell you about crypto investing.
- Find credible sources of information and learning materials
There’s a name for investing without understanding the investment that you’re making – gambling. You see, while no one can know the future course of a trend with 100% certainty, there are a lot of indicators that a cryptocurrency will go up or down in value.
So, how do you learn about crypto? Well, there are a few steps:
- You want to start by understanding the basics. There’s nothing you can do until you master the basic terminology. Still, since you’re here, we’ll assume that this is a field that you’ve already covered.
- Next, you want to find consistent sources of information. While books on the subject matter are great, they’re problematic because this field rapidly develops. Therefore, a shorter format uploaded more recently carries more weight. That is, provided that it comes from a trusted source.
- Another thing to keep in mind is the importance of joining adequate communities. People share opinions and ideas and even share exclusive information. Networking is the key to success in traditional trading and investment. Cryptos aren’t any different.
- If you’re serious about making money this way, you might also want to attend webinars and conferences.
- Lastly, instead of spending all your money on investments, set aside a part of the fund to attend online courses.
This time when you could have blindly bought Bitcoin for a handful of dollars and increased your profit has long gone. Now, crypto trading more closely resembles the conventional investment market. Treat it accordingly!
- Consider the rewards of early adoption
You want to diversify your crypto investments, so why not set a chunk of this diversification fund (sometimes as little as 5%) and consider investing in high-risk, high-yield tokens?
Imagine people who bought Bitcoin while it was $1 and completely forgot about it (perhaps didn’t even check up on the news) until it was $11k, $28k, or even $60k. What we’re talking about here is the risk that’s measured in millions of percent. Sure, the chance of this happening was low, but if you invested only a handful of dollars (or as much as you wouldn’t miss), what’s the harm?
Try to be completely honest about your crypto journey for a second – if you joined the market after 2017, you dreamed about discovering the next Bitcoin. Well, you’re not the only one. The potential of early adoption is one of the most alluring parts of joining this field. So, you want to search for the new cryptocurrencies being created and buy some as soon as possible.
The equation is quite easy with crypto – the number of tokens is limited. So, if you get a supply early on, the cost will go up when the demand increases. This will ensure that the value of your investment rises drastically.
Another reason why crypto and not some other asset is that the buy-in investment cost is incredibly cheap with these new coins. Again, no one prevents you from investing as much as you’d like; however, only with these early investments can you make a considerable profit by investing so little.
- Follow the news
Even if you were never interested in politics, now might be the time to start paying attention. Just think about it – China banned crypto mining in 2021. We’re talking about the world’s most populous country: the second-largest economy.
Sure, there are still holes in this crypto ban, and the digital asset wasn’t banned in its entirety; however, Bitcoin still took a dip as a result (as did the entire crypto world).
We used this example exclusively to show you how a single massive unexpected trend can reshape the landscape of these digital assets. Those who anticipated this ban, or at least anticipated it in this shape and form, had a chance to prepare and insulate themselves from the occurrence. Others even managed to profit from it.
So, we advise following the news and remembering that everything matters.
When the war in Ukraine broke out, Russians used crypto to bypass sanctions, while Ukrainians used it for more effective fundraising.
Moreover, Europe is on the brink of regulating crypto with the highest degree of accuracy and fairness (so far). The proposed draft of MiCA (markets in crypto assets) regulation could be a blueprint that other major economic markets may follow. Anyone interested in crypto should monitor this closely.
Last year, even people outside the crypto world followed the drama surrounding Alameida and FTX. There’s no excuse for being in the crypto sphere and not following closely the development of this situation.
Once again, you have the full right to bury your head in the sand and display genuine disinterest in what’s going on in the outside world. However, this is gambling and not investing or trading.
- Copy trading is still a viable strategy
Copying other people’s decisions is how most people go through life. They dress like their favorite celebrities, talk like their favorite movie characters, and even mimic people from their real lives. Finding your path is often harder than following an example; however, if the example is a good one, is this such a bad thing?
Copy trading is a concept where you find a trader you trust (one that has historically made great decisions) and set up your platform to copy their trades automatically. This is a valid trading strategy that has some positive and negative sides.
Advantages:
- This is incredibly time-saving. You don’t have to do your own analysis; you just trust someone else has done the homework, copy it, and get your plus.
- You can use this to learn. Instead of passively trusting other traders, you can actively analyze their decision-making. Soon, when you gain more experience and knowledge, you can learn how to copy it successfully.
- This is a great profit potential since some people have better intuition and analytical skills than others.
Downsides:
- You depend on others, and that is never a nice feeling. When you succeed, it will feel hollow, and when you lose, the idea that it’s not even your own mistake that you’re suffering for can be unbearable.
- When copy trading, you’re just mindlessly following orders. This means you cannot customize the order to give it your unique stamp.
- Most notably, there’s an extra cost to copy trading. This is always done via a platform, and these platforms usually charge for their services.
Now that you know the good and the bad, it’s up to you to choose.
- Understand the technology behind it
It’s easy to understand company shares, fiat currencies, and the factors that affect them, but what about crypto? Do you know the technology behind these digital assets? Can you grasp the concept of DeFi? Well, one of the starting steps is to learn about the technology and track it as much as you would watch out for regulations. For instance:
- Blockchain: This technology ensures malicious third parties cannot change the ledger at their behest.
- Cryptography: This concept ensures the integrity of the blockchain and ensures the anonymity of users. It’s also a tech most responsible for the name behind this virtual asset.
- Smart contracts: This concept will change the business world as we know it. You no longer have to wait for a contract to be authorized. It’s put into effect automatically as soon as the conditions are met.
You don’t need to understand these things to buy crypto, but these concepts matter if you aim to predict trends.
Buying crypto is easy, but making good crypto investments is simpler than it seems
Whenever we talk about people who made money investing in crypto, there’s a lot of condescension and underestimation involved. Sure, some people got lucky. Others, however, were smart enough to recognize a promising trend and spent years studying and monitoring this field. They did so before anyone else. This alone is respect-worthy.