Bitcoin’s emergence in 2009 was greeted with doubt despite impressing the tech community with its blockchain technology. Since then, cryptocurrency has evolved, with several others entering the market. A recent study suggests that many were not initially interested in cryptocurrency investment, although they are becoming more aware presently. The trend is attributed to BTC price increase and Telsa’s recent cryptocurrencies involvement. If you are interested in joining the space, here is how to invest in cryptocurrencies safely.
Prepare for volatility
The cryptocurrency market is highly volatile, which is why you should prepare for some highs and lows. Dramatic price swings characterize the market and for your mental wellbeing and investment portfolio, prepare for some tough times. Cryptocurrency is still evolving, and investing in something during such stages comes with risks and challenges.
For example, Bitcoin’s price volatility between October and January 2018 was almost 8%, a figure twice its volatility within the last 30 days ending January 15, 2020. This calls for adequate mental preparedness if you intend to join the crypto industry. Get your research right and participate conservatively.
Study and research exchanges
Learn about cryptocurrency market exchanges before you invest the first dollar. According to Bitcoin.com, there are about 500 platforms to purchase and sell your digital currencies. However, every platform comes with unique offers and notable highlights, which is why it is vital to do your research, check for reviews and learn more from experienced crypto investors for a more successful crypto trading journey.
Likewise, you may want to find the right cryptocurrency tax calculator to support your data aggregation and link your cost bases to your sales. This way, you can quickly populate your tax data by calculating your gains and losses. Avoid entering the market without proper research if you want to avoid massive debt and losses. Be practical about your choices.
Stay away from the PR and hype
Like every smart entrepreneur, you can’t invest based on hype and PR, as doing so is highly risky and can cost you a lot. To make money in cryptocurrency, you need the right people to guide you to take calculated risks in addition to doing your research. Depending on the internet, especially social media, or what people who aren’t necessarily experts say can cost you your financial resources. Price crashes are common and can be so sudden and lead to terrible losses. Making money in crypto isn’t one for the light-hearted. With patience and the right support guide, your investment can be worthwhile.
Appreciate the risks and how much you are willing to lose
It is normal to be nervous when taking financial risks, although others may seize opportunities and capitalize on them. Choosing where to belong between these classes of individuals can help you determine the right portfolio for your particular investment. Don’t invest in cryptocurrencies if you are not comfortable with taking risks. Even seasoned investors only risk how much they are ready to lose if things don’t work out as expected.