Cryptocurrency, also known as digital currency, is one of the hottest topics of the 21st century. While there is no physical coin or bill associated with these virtual forms of currency, they still have monetary value and can be traded for products or other forms of digital or actual currency.
Like with all investments, there are risks and returns with cryptocurrency. However, according to the National Bureau of Economic Research, the risks associated with cryptocurrency are distinct from those associated with traditional currencies, stocks, and precious metals. Likewise, each form of cryptocurrency has different risks and returns.
If you’re new to investing in cryptocurrency, surely you’re going to want the most successful experience to ensure you get the most return. The good news is, the following expert cryptocurrency trading tips can help you make that happen.
Avoid buying a coin just because it has a low price.
Of the the biggest mistakes cryptocurrency investors could make is buying a coin at a low price, assuming that its value will soon rise and result in them receiving a nice profit. Rather than basing a coin’s investment value on its current price tag, it is far more important to judge a coin’s potential gain by its current market cap.
Market cap or capitalization of a cryptocurrency is the value of its security. To find this, simply multiply the outstanding stock shares by the current stock cost. In other words, you multiply its supply by the price of the token or coin.
Currently, Bitcoin has the highest market cap at over $109,200,000,000 with a circulating supply of over 17,690,000 and a price-per-coin of about $6,100.
Get Bitcoins faster with secured peer-to-peer Bitcoin websites.
Common methods of purchasing Bitcoins are earning them through mining, purchasing them via a cryptocurrency exchange, or exchanging coins in person. However, waiting for a bank transfer can be frustrating. Thanks to peer-to-peer Bitcoin websites, you can get your beloved Bitcoins faster.
With Xcoins, for instance, you can purchase Bitcoins quickly with a credit card. Transactions via this automated system are secure, leaving you confident that you won’t get hacked. After the payment is approved, Bitcoins can be transferred within a matter of just minutes, leaving things convenient on your end.
Don’t just focus on trading Bitcoins.
Bitcoins are perhaps the most widely known and used forms of cryptocurrency to date. However, focusing on only trading one form of cryptocurrency, regardless of what it is, may be holding you back. This is especially true since the market for different cryptocurrencies is constantly changing.
Truthfully, there is no single cryptocurrency that is best to invest in. Apart from investing in Bitcoin, some of the best cryptocurrencies to consider investing in, in 2019 include Litecoin, Binance Coin (BNB), Ethereum, and Basic Attention Token (BAT). Advanced investors should invest in NEXO, Monero (XMR), NEO, Beam, and Cardano (ADA).
Consider how much time you can allocate to investing and trading.
Cryptocurrency investment and trading are not for folks who want to kick back and relax all day long. Like any day job, investing in cryptocurrency requires effort and attention because the cryptocurrency market is constantly shifting. With a fast-paced market, are you sure you can keep up?
If you have little time to put into cryptocurrency investing and trading, your best bet is to go for coins and tokens that are less risky. Likewise, making fewer investments is also a good idea for those who won’t be able to monitor their portfolio.
Your age will help you determine your investment risk.
Apart from deciding how much time you will be able to spend monitoring your portfolio, your age is also a heavy determinating factor with whether or not you can take on higher, riskier investments. Although age is just a number, it also is a big indicator of your current lifestyle and how much money you require at that stage in your life.
Truth be told, younger individuals can often take more loses, especially if they are still living under their parents’ roof. As for older adults, the loses may be riskier if they are in the midst of raising children, paying for children’s education expenses, and/or saving for retirement.
Trade with logic, not with your emotions.
Staying rational with cryptocurrency trading is important. Trading based on your emotions, however, may cause you to end up getting hurt in the long-run. Whether you’re fearful or excited about making a coin or token purchase, remember that emotions are temporary.
While having emotions is a good thing, using them to dictate your investments may cause you to forget that there are still risks involved in making any cryptocurrency move. Your excitement may blind you from this. Likewise, your anxiousness and fear might blind you from the potential gains.
Never assume cryptocurrency investment is a get-rich-quick scheme.
Think about it: many of the wealthiest people in the world are rich not because they were lucky but because they put in a lot of hard work, effort, and risk into achieving the wealth they have today. While someone can scratch a lottery ticket and win millions, the chances of that occurring are slim.
Likewise, investing in cryptocurrency is not an easy way to get rich. Even for those who do end up doing well with cryptocurrency trading, there’s a level of skill, effort, and knowledge that is required to get to that point, and surely, there are often pitfalls and frustrations along the way.
Know all the risks involved in cryptocurrency before you consider trading.
Cryptocurrency isn’t just about buying and trading, hoping to get the most bang for your buck in the process. Besides the risk of loss, other potential risks are involved with cryptocurrency that some newer or prospective investors may not realize.
According to the Federal Trade Commission, the value of digital coins and tokens is always rising and falling, much quicker than traditional forms of currency. Likewise, digital currency isn’t backed by a central bank or government, and you won’t have the same protections over storing your digital currency as you would with a bank account.
With adequate research on each and every risk that may be associated with cryptocurrency investment, this can help feel confident that you are making the right decision for you.
Investing in cryptocurrency, like other investments, has risks. For some folks, those risks are not worth taking. As for avid investors, they may find the risks completely worth it if it means getting potentially significant gains. However, if one doesn’t know what they are doing, they could lose everything.
However, following the latter advice from expert investors, you can better ensure you are able to be successful with cryptocurrency investment yourself.