Investing in Cryptocurrency?3223089
Be sensible and follow all of the basic rules of investing. A few people have got burnt fingers by not following probably the most basic good sense rules which apply to all kinds of investing. I have made a listing of the main ones to take into account. Here they are.
Number one: Invest only discretionary money in Cryptocurrency
The money you are using to purchase Bitcoin, Ethereum, and the like must be money it is possible to fully afford to lose. It should be discretionary extra cash. You wouldn't navigate to the races or even the betting shop along with your retirement fund and employ that to risk. Cryptocurrency investing needs to be treated in the same way. It is highly volatile. The number one rule would be to purchase cryptocurrency with money it is possible to fully afford to lose only using your discretionary spending cash.
What is discretionary spending cash?
That is up to an individual's own priorities and circumstances. One individual may consider money put aside for a holiday to the islands as discretionary spending but another person may not want to risk those funds in Bitcoin.
Number two: Assess the risk
As with every investment you should assess the risk. It is no secret that Bitcoin is volatile but if you abide by rule number one then there will be little or no alternation in your financial situation in the event the cryptocurrency market needs a tumble. Market volatility isn't the only risk investors in a few countries are presented with. China imposed a blanket ban on all crypto transactions so that you can stop all cryptocurrency related activities.
Number 3: Don't get greedy
Greed provides the better of a lot of investors. They begin to see the value of their Bitcoin skyrocket and choose to use money that they should not be speculating with, for choosing more Bitcoin. Having some form of exposure to the cryptocurrency market adds a fantastic string for your financial bow but don't try to get rich quick by diverting your entire money to Bitcoin and ignore other forms of investment.
- 4: Diversify
Spreading your risk helps minimize the risk of losing your entire money in one go. Several investors lost all of their money in one major financial hit through the 2008 Global Financial Crisis when companies they invested their life savings with went under. They invested their eggs into one basket. What needs this have got to do with investing in Bitcoin? Hacking can be a danger with Bitcoin therefore having money spread among different platforms will decrease your chances of this happening.
- 5: Use different platforms
Hacking can be a possibility which could see your cryptocurrency disappear. It's a good idea to speculate your cryptocurrency among different platforms including Blockchain, Binance, Blockfi. etc. That way if one of these platforms gets hacked you may not lose everything in one go. Number six: Look for a safe place to hold your password This is very important because several Cryptocurrency trading will simply allow you a certain number of wrong passwords and next you will be permanently locked out of the site. You wouldn't want this taking place. There are several items that can go wrong inside the crypto-market but with careful planning you can mitigate the risks.
