These days, more and more people are investing in cryptocurrency. With organizations starting to use and regulations starting to come into play, it is becoming clear that the use of this new currency is not just a fad. While cryptocurrency investment offers many benefits, it does not come without any risks.
With so many crypto enthusiasts rushing to invest, it’s important to be aware of the possible risks surrounding this market. As a rule of thumb, you need to have a goal in mind before investing.
Some people don’t set their goals and only wish to have quick gains. Others are only doing it out of curiosity without even learning about the market.
If you are only after short-term gains and sell high, you need to go for a coin with high liquidity. However, be sure to rebalance your portfolio and be ready for risk management. Without any plans, the risks of not producing good results are high.
For short-term gains, it would make sense to buy low and sell high — but there’s a lot more to it than that. You’d need to choose a coin with high liquidity, have a sense of risk management, and rebalance your portfolio every so often. Without a plan, you’re simply not going to produce good results.
However, if you are making a long term cryptocurrency investment, there’s a lot of cryptocurrency investment opportunities for you. It will need more studies and research to ensure you’ll have a sustainable profit. You can even take up a crypto course that offers thorough information on how to invest in cryptocurrency.
Regardless of your reason why you’re doing cryptocurrency investment, don’t gamble your money away and wish for your luck to work. To help you plan how to make your next move, here are the 4 things you need to know about cryptocurrency investments.
1. Research about the risks
Investment always comes with a risk. So be sure you understand the risks you may experience when investing in crypto currencies. To give you an idea, here are some of the common risks you might experience:
- ICOs are usually startups. Therefore, investing in them means you are risking of losing your money, especially if the ICO startup fails.
- Cryptos are easier to manipulate as compared to securities
- Crypto tokens don’t pay a dividend
- Crypto markets are not regulated so bigger players might play the market better at your expense
2. Don’t rely on the whitepaper
When doing a cryptocurrency investment, make sure to check both the Whitepaper and Smart Contract thoroughly. Sometimes Whitepaper and Smart Contract do not reflect each other’s statement. Moreover, founders sometimes add a clause so they can amend the Smart Contract if needed in the future.
3. Start with small amounts
You’ve probably heard it a thousand times but it's worth repeating, crypto investment can be risky. Therefore, you want to start with small amounts. Never go all in or invest an amount you cannot afford to lose. As a beginner, you want to keep your investment to crypto to a reasonable level. Also, try to diversify your crypto holdings. The more you diversify your coins, the more likely you’ll hit gain more profit.
If you want to take your career in bitcoin trading in Singapore to the next level, contact Crypto Trader today. They offer crypto courses designed to help you learn about proven and tested strategies straight from a crypto-trading expert. Check out their website for details.