Today, you can invest in cryptocurrency quickly and easily. You have the freedom to invest with the help of online brokers, but you cannot say for sure whether it is a reliable venture. There are many risks and pitfalls to face if you are thinking of entering this field. However, you don’t need to be a master in the world of computer science or finance to get started. This means you need to make an informed decision. In this article, we will talk about some common mistakes that most cryptocurrency investors make. Read on to learn more.
1: You are buying the wrong coins
If you have decided to buy Bitcoin, you should 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 forks to watch out for.
Although they are not bad or scams, make sure you know what you are buying. Even if you buy the wrong coin, you can still sell it back and look for the right one.
2: You’re Not for the Wild Ride
If you want to enter the world of cryptocurrency, you need to have nerves of steel to deal with volatility. Unlike the traditional financial world, cryptocurrency has extreme volatility, according to Teresa Morrison, who is a certified financial planner in Arizona.
According to her, as a new investor, you should invest a small amount at the beginning, like $100 per month, and then forget about it. If you follow the market daily it will drive you crazy.
Also, just because you are a beginner, you may want to stick to 2 to 3 cryptocurrencies that you are familiar with. Ideally, you can consider established coins like Bitcoin and Ethereum first.
3: You don’t double-check the address
Many cryptocurrency traders lose their coins just because they don’t re-verify the address. Unlike a conventional bank transfer, you cannot simply reverse a transaction. So you have to be very careful when doing this type of transaction using cryptocurrency. If you are not careful enough, you can lose thousands of dollars in seconds.
4: You have lost access to your wallet
Although there is a limited supply of 21 million bitcoins, the entire number of bitcoins is not created. The reason is that many of the coin holders have lost access to their wallets due to forgotten passwords.
According to the Chainanalysis report, 1 in 5 Bitcoins mined so far is 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. We hope these tips will help you be safe and successful as a trader or investor.