Bitcoin and other cryptocurrencies have plummeted again. Is this the ideal time to get in? Read these 8 tips before you start with cryptocurrency. You can no longer ignore Bitcoin and other cryptocurrencies. Now that more and more big companies like Tesla and PayPal are seeing bread in crypto, you may be inclined to start investing as well.
Do you also want to start? Never do that on a whim. Here are 8 tips to get you started.
1. Do your research
It feels a bit like an open door, but we still think it’s important to report. Never start investing in cryptocurrencies until you know what you’re getting into. The number of crypto coins you can invest in these days is overwhelming. Therefore, do not only research crypto itself, but also the currency. Don’t put money into something blindly because your neighbor recommended it.
Finally, it is good to research the different platforms on which you can buy Bitcoin or other cryptocurrency. That way you know which ones are reliable. And not only that: if you pay close attention to the costs, you can save a lot of money.
2. Start with a practice amount
Investing in crypto is not for everyone due to the significant fluctuations. So start with a small amount first to practice and get a bit of feeling with it. In any case, you should invest with money that you can afford to lose, but this practice amount is so low that you won’t be awake if the currency in which you have invested falls.
3. Spread
Anyone who has read an article of mine about investing before will know that I am a big fan of diversification. This is not only the case with ETFs and stocks, but also with crypto. If you want to invest more money, it is good to diversify your portfolio. So you don’t bet on one horse, but on several.
4. HODL
Not sure what we mean by this? Then go back to tip 1. Just kidding, of course. This term means Hold on for Dear Life. Renovato.io has enough information. This means that you should not panic sell your crypto coins if their value drops. Just hold onto your coins instead of selling them at a loss and losing money. If all goes well, they will climb out of the valley again.
This is also one of the reasons that you should always invest in crypto with money you can afford to lose. In principle, you can always sell your coins, but you don’t always want to. Make sure you have the time to make the coin rise again.
5. Buy low, sell high
Another well-known term in the crypto world: buy low, sell high. That is exactly what you should try to do. It is very tempting to start with cryptocurrency when a coin is doing really well and it shoots up in value. However, this could turn out to be wrong if the currency then plummets again.
It is therefore better to do good research into the cryptocurrency you want to start with (we will come back to tip 1) and then buy these coins if they are in a dip.
Today, for example, Bitcoin and many other cryptocurrencies have plummeted after news that President Biden is considering charging wealthy individuals significantly more in taxes on the profits they make from their assets. Therefore, if you want to invest in Bitcoin, now is a better time to get in than last week, when Bitcoin hit a new all-time high.
6. Withdraw your investment after winning
A currency in which you have invested money is growing nicely, so that you now have a lot more than your investment. It is then an idea to sell your original investment and leave the rest. In this way you only invest with ‘won’ money.
7. Always leave something
It is difficult to estimate what exactly is the right time to sell your crypto again. Visit moveco.io has enough information. After all, you don’t know yet whether the currency has reached its peak. It is therefore smart to always keep some coins on hand if you decide to sell. They never FOMO you if the currency rises even further.
8. Be safe
We conclude with one more tip, but no less important: ensure sufficient safety. You have to ensure that your coins are safe, after all, there is no bank that arranges this. The very first step in this, of course, is to sign up with a reliable exchange. Make sure you always have 2FA turned on.