Investing in Cryptocurrency?3157832
Be sensible and follow all the basic rules of investing. Some people have got burnt fingers by not following some of the most basic common sense rules which apply to all types of investing. We have made a listing of the main ones to take into account. Here they are.
Number 1: Invest only discretionary cash in Cryptocurrency
The money you are using to purchase Bitcoin, Ethereum, and stuff like that must be money you can fully afford to lose. It ought to be discretionary extra cash. You wouldn't navigate to the races or the betting shop together with your retirement fund and make use of that to risk. Cryptocurrency investing must be treated just as. It is highly volatile. The number one rule is always to purchase cryptocurrency with money you can fully afford to lose using only your discretionary extra cash.
What is discretionary extra cash?
That is up to an individual's own priorities and personal circumstances. One person may consider money put aside for a holiday to the islands as discretionary spending but someone else may not desire to risk that money in Bitcoin.
Number two: Assess the risk
Just like any investment it is important to assess the risk. There is no secrete that Bitcoin is volatile however if you simply abide by rule primary then there will be little or no change in your financial situation in the event the cryptocurrency market needs a tumble. Market volatility isn't only risk investors in certain countries have to face. China imposed a blanket ban on all crypto transactions in order to stop all cryptocurrency related activities.
Number 3: Don't get greedy
Greed gets the better of a lot of investors. They start to see the value of their Bitcoin skyrocket and decide to use money that they can should not be speculating with, for purchasing more Bitcoin. Having some form of exposure to the cryptocurrency market adds a thrilling string to your financial bow but don't try to get rich quick by diverting all your money to Bitcoin and ignore other styles of investment.
- 4: Diversify
Spreading your risk helps prevent losing your entire money in one go. Several investors lost all their money in one major financial hit during the 2008 Gfc when companies they invested their life savings with went under. They invested their eggs into one basket. What needs this got to do with purchasing Bitcoin? Hacking is a danger with Bitcoin therefore having money spread among different platforms will reduce your chances of this happening.
- 5: Use different platforms
Hacking is really a possibility which could see your cryptocurrency disappear. It's a good idea to invest your cryptocurrency among different platforms including Blockchain, Binance, Blockfi. etc. That way if one of such platforms gets hacked you won't lose all things in one go. Number six: Look for a safe place to store your password This is very important because many of these Cryptocurrency investing will simply allow you a particular number of wrong passwords and after that you will be permanently locked out of the site. You wouldn't like this taking place. There are several things which can go wrong inside the crypto-market but with careful planning you can mitigate the risks.
