Crypto isn’t a currency that you can buy or exchange in banks or traditional exchanges. It exists only in a digital environment which complicates a few things. Inspired by stories of how some people became millionaires overnight due to Bitcoin’s price boom, people invest a lot of money into the blockchain industry. Unfortunately, it’s dangerous for a few reasons. For a starter, the cryptocurrency is volatile, and the chances of earning a fortune and losing everything overnight are pretty high. Therefore, there are a few mandatory things that you should consider before investing in this industry.
1. Always Consider Chances of Losing
There is no entity like the Central Bank monitoring the cryptocurrency industry. Therefore, it’s very unstable, which makes investing in it highly risky. However, the level of danger varies depending on the crypto. For example, Bitcoin has been around for quite some time and is relevantly stable. It’s highly unlikely that Bitcoin may disappear in the nearest future, but the rates change quite frequently. However, if you want to exchange Dogecoin to PancakeSwap, check their rates and tendencies. And before buying any crypto, always consider the chances of losing it.
2. Do Your Homework
Before investing in a particular cryptocurrency:
- Do your homework.
- Spend hours and days, if required, to study the technology and understand its risks and advantages.
- Besides reading articles on the Internet, talk with people who own cryptos. If you don’t know anyone, go to forums and social media groups to ask people what they think of blockchain technology.
- Ask for their advice and recommendation.
- Don’t be afraid to ask questions and go deep into the topic.
3. Don’t Invest Just to Follow the Trend
Some people invest in digital currencies just because crypto is trending nowadays. It’s a bad idea to buy Bitcoin only because some friends or colleagues bought it. It would be best if you thought like a business person and researched. Looking up Dogecoin rates and seeing that it’s up 10% compared to yesterday isn’t research. You should study its behavior over a long period to understand its tendency.
4. Always Verify Crypto Exchanges
To acquire or sell cryptocurrencies, you should use services of exchange platforms, one way or another. It’s the most responsible and dangerous moment. Take your time to research and identify reliable and profitable crypto exchange online platforms. Compare their rates, transaction fees, and security systems. If you don’t have enough market knowledge, it’s better to delay the crypto purchase process rather than acquire and lose it immediately.
5. Buy a Fraction of Coin For The Starter
You don’t have to buy a whole crypto coin; buy only a fraction. This approach is particularly recommended for beginners who aren’t sure about their skills. You can spend $20 to acquire Bitcoin and play around with it. Invest more money only if you’re confident and knowledgeable enough about the market.
Final Thoughts
As you can see, blockchain technology isn’t child’s play. It’s a complicated and risky industry where knowledge is power. Some people say that their gut is their only adviser in matters of crypto investment. Having such instincts is amazing, but it isn’t reasonable to invest thousands of dollars relying on intuition only. Hence, always take your time to educate yourself about blockchain technology and the crypto market.