10 Things you should know before you buy the First Crypto
One of the most difficult things for consumers to avoid as it comes to cryptocurrency trading is being swept up in the excitement. Digital currencies have rapidly become a prominent part of both retail and institutional investors’ portfolios. cryptocurrency expert, on the other hand, has continued to warn investors of the stock’s volatility and unpredictability.
If you’ve wanted to invest in the cryptocurrency market, just like every other investment, you should do your homework before handing over any money.
Do you want to learn everything there is to know about blockchain technologies and cryptocurrency trading? You should totally check out some cryptocurrency certification to get started with.
Here are the top 10 things that you need to keep in mind before you get into Cryptocurrency trading.
- Don’t risk more than you can expect to lose by investing.
Cryptocurrency is a riskier investment than many others. Except for volatility, nothing is certain. Furthermore, in the majority of cases, it is unchecked. Cryptocurrency rates fluctuate dramatically from minute to minute.
- Do your homework
Spend hours upon hours studying the technologies so you grasp the value proposition and the risks before investing a considerable sum of money in any digital currency.
- Don’t do it because everyone’s doing it
If the only way you’re spending is to keep missing out on everything, the only thing you won’t lose out on is sacrificing something.
Fear of losing out (FOMO) is a surefire way to squander whatever money you’ve amassed over the years.
- If something seems to be too good to be real, it most likely is.
No matter where you go, what you do, it is almost inevitable to not come across someone trying to rob you off. How you protect yourself from this? Research.
- Don’t trust, personally verify.
Trust your gut feeling!! Really! There’s no foolproof way to identify the scammers but if it sounds too good to be true- consider it a red flag and don’t invest.
- Be cautious about ‘unit bias.’
Just because a coin is worth $1 doesn’t mean it’s “cheaper” than bitcoin, which is worth $58,000. Some coins are better than most.
There are thousands of cryptocurrencies, some of which attempt to replicate bitcoin and others which attempt to solve different problems. They all have different degrees of decentralization and developer funding.
- If you lose the keys, you lose the coins
Cryptocurrency, like cash or jewels, is a bearer possession, which means the buyer is believed to be the legitimate owner. It’s gone once it’s been lost or robbed.
That’s why experienced users warn against entrusting the cryptographic keys to a digital currency wallet to a third party, such as an exchange since these businesses are also unregulated and vulnerable to hacking or exit scams.
- A fraction of cryptos can be purchased
You don’t have to buy the whole coin. So, if you’re curious about how this stuff works, you can buy it for as little as $1 and experiment with it.
- Recognize the tax implications
If you buy a coin for $1 and it doubles in value, and you spend the extra dollar on something, you must register and pay tax on the capital benefit. Despite the crypto industry’s lobbying activities, there is no exception.
- Don’t be concerned with price.
Markets fluctuate from day to day, hour to hour, minute to minute, but every cryptocurrency worth its salt, any investment worth its salt, is a long-term play.
There you go!! Make sure you do complete research before investing. Learn Blockchain and get an idea of how things work.