Today you can invest in cryptocurrency quickly and easily. You have the freedom to invest with the help of online brokers, but you can’t say for sure if this is a safe endeavor. There are many risks and pitfalls you have to face if you plan to enter this area. However, you don’t have to become a master in the world of computer science or finance to get started. This means that 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 buy the wrong coins
If you decide to buy bitcoin, you need to be careful. There are different types of bitcoins, such as private bitcoins, bitcoin SV, bitcoin gold and bitcoin cash. In other words, there are many shoots to watch out for.
While these 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 are not for the Wild Ride
If you want to enter the world of cryptocurrency, you need to have nerves of steel to face instability. Unlike the traditional financial world, cryptocurrency has extreme volatility, according to Teresa Morrison, a certified financial planner in Arizona.
According to her, as a new investor you should initially invest a small amount, for example $ 100 per month, and then forget about it. If you keep an eye on the market every day, 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 first look at established coins such as Bitcoin and Ethereum.
3: Do not double check the address
Many cryptocurrency traders lose their coins just because they do not check the address. Unlike a conventional bank transfer, you can’t just cancel a transaction. So, you need to be very careful when performing 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 number of 21 million bitcoins, the total number of bitcoins is not created. The reason is that many 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 not available 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 be successful in the world of cryptocurrency trading. We hope that these tips will help you be safe and successful as a trader or investor.