Investing in cryptocurrencies has become somewhat of a craze of the last few years, with many rushing to try and earn their millions by pumping money into bitcoin and the like. However, investing in any form of cryptocurrency shouldn’t be considered a way to get rich overnight, as there are many pitfalls to navigate. Therefore, if you’re thinking about cryptocurrency investing, keep reading to learn how how to do so responsibly.
Before committing any money as an investment, you must know the basics. A lot of people have jumped in and invested without knowing what they’re doing and have, as the saying goes, “come a cropper” as a result. Putting the time in to learn the basics will help you in the long run as an investor, otherwise, you’re effectively investing blind and hoping for the best based on luck.
As an investor, you will learn about things such as exchanges, private keys, public keys and wallets, with the latter being of huge importance. A wallet is required by any crypto user, but these have often become the target of cyber crooks, who create fake wallets and wallets loaded with malware. Therefore, using a reputable wallet such as the bitcoin wallet by Luno is advised, as is using reputable exchanges and websites too.
If you’re new to the crypt investment scene, or the scene in general, your inexperience can at times be played on by others. While there are many genuine skilled crypto traders and experts out there, there are also plenty who claim to be looking out for your best interests, but they’re only in it for themselves. Therefore, if you’re considering listening to the advice of others, check them out first, and always ensure that any decisions are made solely by you, and not under the pressure or coercion of others.
Now, there are risks when it comes to investing in cryptocurrencies, like there are when investing in anything. So it’s important to have a budget and stick to it. You should only really be looking to invest what you can afford to lose, and while losing your investment isn’t a foregone conclusion, it can happen, especially with crypto process being highly volatile. Going off your budget could negatively affect your finances elsewhere, which is then going to have a knock-on effect.
If something in the cryptocurrency world seems too good to be true, it probably is. A lot of people made a lot of profit when bitcoin stepped out of the shadows back in 2016, and since then, investors have been looking to repeat this feat with new cryptos to hit the scene.
However, the majority of ICO offerings and deals marketed towards the crypto scene are in fact scams. They’re designed to look extremely advantageous, but the reality is, they’re not. So, stay clear of anything which promises huge returns in a short space of time, as it will probably result in huge losses.
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Thanks. This was very informative! I’m still leaning towards saving in physical gold and silver, rather than cryptos though.