Ever since cryptocurrencies have started entering the mainstream, scores of individuals have invested their money in these digital coins. The aggressive volatility of cryptos is making many smart people look for refuge elsewhere. This game is not for the faint of heart.
As the cryptocurrency market is very new and does not necessarily follow the laws of traditional investing, the chances of making mistakes shoot up instantly.
Here are 3 mistakes in cryptocurrencies that could make you look dumb and immature. Avoid making them and create your way to a crypto fortune.
Being too fearsome
If you want to invest in cryptocurrencies, remove the fear of losing all your money. This fear will often make you sell too quickly, leaving you with lower value than what you could have earned if you remained invested in the market.
Because cryptos are new and risky markets, analysts suggest that you must always consider your investment in cryptos a lost cause. You will trade more calmly if you believe this. However, if you are investing here, thinking that no loss will ever occur, you are wrong.
When markets face a correction, do not panic. Simply ensure that you invest in the right cryptos and wait for the right opportunity to exit.
Expecting impossible results
In 2017, bitcoin provided 1,700% appreciation in price to investors. However, in the beginning of 2018, it faced a major market correction and now lost close to 55% of its market cap. It is highly likely that your investments can go through the same.
If you didn’t sell when prices appreciated sharply, you will have to wait through the correction too. It is important to realize what your personal objectives are. Ideally, getting a 2x return is considered healthy in terms of cryptocurrencies.
As soon as you double the amount, you can exit. This way, you stay away from major market moves, but get a good appreciation of capital too. Getting 1.5x return is equally good. If you feel the market is going to move up, you could re-enter and maximize gains.
Not having a long-term goal
Impulse buying and selling is counted as a sin in any investment instrument. Bitcoin and other cryptocurrencies have a great future lying ahead of them, at least in 2018. If you are looking for true appreciation in price and a massive crypto wealth, you should avoid engaging in short-term trades.
Once you invest your money, stay strong through the losses and gains. Only people who held bitcoins through January 2017 to December 2017 were able to realize 1,700% returns on investments. Those who sold their investment fearing a crash in January 2017 ended up looking dumb.
Always remember that you invest in a currency with some fundamental value. Short-term trading is great for appreciating your investment quickly. However, it is only a fundamentally strong crypto that will help you in creating wealth.
Have you made these mistakes in the past? Don’t beat yourself up for the mistakes of the past. Digital currencies have a long way to go and they promise a huge potential as well. You can still correct your investing ways. Good luck!