(Newswire.net — November 22, 2021) — The crypto world is volatile. Many people jump into the crypto world and start investing without thinking of the consequences. Even though you know how to purchase and invest in cryptocurrency, you also need to know the mistakes to avoid.
This is because mistakes in the crypto world can cause massive financial problems. Many people start purchasing crypto coins just because they get caught in the hype. On the other hand, some people don’t determine their portfolio and invest in an irrelevant crypto account. Despite the mistakes, these will undoubtedly affect your financial status, not to mention your emotional well-being.
Here are the top 3 crypto investment mistakes you need to avoid at any cost.
Purchasing Cryptocurrency during the Peak Time
One of the biggest mistakes people make while investing in crypto is that they purchase the coin when it’s high. Earlier this year, many people started purchasing Bitcoin when the price was all-time high (64k). However, when the price came back down and started showing signs of stability around 50k, the people who had invested earlier started panicking.
Remember that the crypto world is highly volatile. The price can go down or even up to within a short period. Therefore, you need to be strategic regarding the time of your investment. This way you can minimize the risks of losing money. Many seasonal or non-experienced crypto investors use the dollar-cost averaging technique to manage their risk. Even though this type of strategy will help you with risk management, you cannot reap the higher gain.
Brian Colombana Says You Don’t Research the Coin before Investing
This is another common mistake rookie crypto investors make before investing their money in some specific coin. Do you know that anyone can build cryptocurrency? Some cryptocurrencies might not be genuine. For example, a couple of days ago a new coin was introduced in the crypto market known as ‘SQUID’. Even though the value of the coin boosted from $0.01 to $4.32, the coin vanished from the market seven days later, resulting in a massive loss for the investors.
Therefore, make sure you conduct some research about the company before investing in cryptocurrency. See if there’s solid news regarding the coin on the internet.
Apart from that, don’t make mistakes by investing in cryptocurrency based on the trend, rumor, or hype. Just because you’ve been told that the coin will gain popularity doesn’t mean you need to invest all your money on that coin.
Investing More Than You Can Afford
This is one of the greatest crypto trading mistakes you want to avoid, says Brian Colombana. When the market is dominating, you might want to invest all your money into cryptocurrency hoping that you will receive massive returns within a couple of days. However, just like we mentioned earlier, the crypto market is highly volatile.
You might have heard the stories where people invested $1000 which turned over to $100,000 within a few weeks. But you should not underestimate the vice versa. Many people faced severe consequences by investing all their money in the crypto market. Therefore, make sure you invest the money you can afford to lose.
Conclusion
These are the top 3 crypto investment mistakes you should avoid. Remember, that the crypto market is relatively new. Therefore, don’t build your entire portfolio based on cryptocurrency. Putting all eggs in the market is not an ideal decision.