For the last 12 months I have been slowly trading cryptocurrency and right now this has become a very hot topic given the recent boom that Bitcoin and Ethereum are going through. Something very similar to this happened back in 2017, and that meant that so many people were looking to jump on the train, yet got there too late. What we have seen tis time around however is the price go even higher for these cryptos, and many smaller ‘Alt’ coins are catching some of that pace too. This could be a good time to invest in crypto, but here is what you need to know before you do.
No matter what most people tell you, there is little that you can do which will truly give you an insight into what the price will be, this is a relatively unstable market which can easily be pumped and dumped by whales, who are the massive investors going in with millions. What you need to have however is a basic understanding of the blockchain, of what cryptocurrency is and what DeFi tokens are, and how their networks operate. This will give you the best indication as to where to buy.
Clearly Defined Goals
The way that you should be investing is with an eye on clearly defined goals which are going to dictate how and when you buy and sell. If you are staring off with $1000 for example and you’d like to turn it into $10,000, then this will dictate how you go about selling, when you will sell, and when you may look to buy back in. It is critical that you have a goal here, otherwise you may struggle to know when to sell and when to keep on buying.
You are going to hear a great amount of talk about people becoming millionaires or people investing hard and crypto changing their lives, but in the main these are people who have invested big. Don’t stake all of what you have on the chance that you may one day make big money, it is far easier to focus on making some gains, and then building on that. Because of the way that social media is these days, it can be very easy to fall into the trap of believing everything you read on there, the truth is that in most cases, the people writing are not actually investing. There are some experts on there like Javier Burillo and others in the industry who are worth listening to, yet there are man who simply aren’t worth the time of day.
How Much Can You Afford To Lose
The key point to bear in mind here is that you may lose your investment, it is highly unlikely but the possibility absolutely exists. It is for this reason that your mindset should be ‘how much can I afford to lose in the worst case scenario’. If you have this mindset then you are never going to be disappointed with how the market moves, and you certainly won’t be in a position where you get ruined, because you will always be conscious of the price, and your position.
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