Investing in Cryptocurrency?5417034
Starting point and follow all the basic rules of investing. A few people have got burnt fingers by not following many of the most basic good sense rules which affect all types of investing. We have made a list of the main ones to think about. Here they are.
Number 1: Invest only discretionary cash in Cryptocurrency
The money you're using to purchase Bitcoin, Ethereum, and the like must be money you are able to fully manage to lose. It must be discretionary extra cash. You wouldn't go to the races or the betting shop together with your retirement fund and make use of that to risk. Cryptocurrency investing must be treated in the same manner. It is highly volatile. The number one rule is always to purchase cryptocurrency with money you can fully afford to lose only using your discretionary spending money.
What is discretionary spending money?
That is up to an individual's own priorities and circumstances. One person may consider money put aside for a holiday to the islands as discretionary spending but another person may not want to risk that money in Bitcoin.
Number two: Assess the risk
As with any investment you should assess the risk. There is no secret that Bitcoin is volatile however if you simply abide by rule number 1 then there will probably be little or no alternation in your financial situation in the event the cryptocurrency market requires a tumble. Market volatility isn't the only risk investors in a few countries need to face. China imposed a blanket ban on all crypto transactions so that you can stop all cryptocurrency related activities.
- 3: Don't get greedy
Greed has got the better of a lot 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 thrilling string for your financial bow but don't try to get rich quick by diverting all your money to Bitcoin and ignore other forms of investment. Number 4: Diversify Spreading your risk helps prevent losing all your money in one go. Several investors lost all their money in one major financial hit through the 2008 Global Financial Crisis when companies they invested their nest egg with went under. They invested all of their eggs into one basket. What's this have got to do with investing in Bitcoin? Hacking is a danger with Bitcoin therefore having money spread among different platforms will reduce your chances of this happening. Number five: Use different platforms Hacking is really a possibility which could see your cryptocurrency disappear. It is a good idea to invest your cryptocurrency among different platforms including Blockchain, Binance, Blockfi. etc. This way if one of these platforms gets hacked you may not 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 GPT-integrated trading tools will simply allow you a particular number of wrong passwords and after that you will be permanently locked out from the site. You do not need this taking place. There are several things which can go wrong in the crypto-market but with meticulous planning you can mitigate the risks.
