Today, you can invest in cryptocurrency quickly and easily. You have the right to invest with the help of online brokers, but you cannot say with certainty that it is a foolproof venture. There are many risks and pitfalls that you need to face if you are thinking of going into this field. However, you don’t have to be a whiz in the world of computer science or finance to get started. This means you have to make an informed decision. In this article, we are going to talk about some common mistakes that most cryptocurrency investors make. Read on to learn more.
1: You are buying the wrong coins
If you decide to buy bitcoins, you need to be careful. There are different types of Bitcoin such as Private Bitcoin, Bitcoin SV, Bitcoin Gold and Bitcoin Cash. In other words, there are many branches that you need to keep an eye on.
While it’s not bad or a scam, make sure you know what you’re buying. Even if you buy the wrong coin, you can still sell it back and search for the right one.
2: You are not for a Wild Ride
If you want to enter the world of cryptocurrency, you need to have nerves of steel to face volatility. Unlike the traditional financial world, cryptocurrency has extreme volatility, according to Theresa Morrison, who is a certified financial planner in Arizona.
According to her, as a new investor, you should first invest a small amount, like $100 a month, and then forget about it. If you follow the market daily it will drive you crazy.
Other than that, just because you are a beginner, you can stick with 2-3 cryptocurrencies that you are familiar with. Ideally, you can consider established coins like Bitcoin and Ethereum first.
3: You don’t verify the address
Many cryptocurrency traders lose their coins just because they don’t verify the address. Unlike a regular bank transfer, you cannot simply reverse the transaction. Therefore, you should be very careful when making this type of transaction using cryptocurrency. If you are not careful enough, you can lose thousands of dollars in a matter of seconds.
4: You have lost access to your wallet
Although the number of bitcoins is limited to 21 million, the full number of bitcoins is not created. The reason is that many coin owners have lost access to their wallets due to forgotten passwords.
According to a report by Chainanalysis, 1 in 5 bitcoins mined so far are inaccessible due to lost passwords. So make sure you keep your password in a safe place before you start reading.
In short, we suggest you avoid these four most common mistakes if you want to succeed in the world of cryptocurrency trading. Hopefully these tips will help you stay safe and successful as a trader or investor.