How to Invest in Cryptocurrencies Like an Expert?
After the steady decline of Bitcoin through 2018, many people jumped away from cryptos being a viable investment option.
However, through 2019 and now, in 2020, we followed a substantial increase in BTC value. ($10,232.97 per BTC at the time of writing)
So, Bitcoin, along with many other altcoins, seems to be back on the table. Even for the masses, want-to-be investors.
However, to invest in cryptocurrencies is no easy task. You’d need extended knowledge, thorough research, and an eye for beneficial innovations.
In addition to those, every successful crypto investor has their own set of rules and guidelines. More importantly, they all share a similar mindset toward cryptos.
We’re going to explore exactly that below. So let’s give it a go!
Why Invest in Crypto?
First of all, a ton of aspiring investors assumes cryptos are like a lottery. All it takes is one big hit at the right moment, and they’ll be rich for the rest of their lives.
Well, although not impossible, single-hit wonders rarely happen on the crypto exchanges. Especially now, when the majority of traders follow cryptocurrencies sharply.
In opposition to the single-hit wonder, expert crypto traders rely on supported belief and persistence.
If you believe cryptocurrencies can replace fiat money as an ultimate global currency, you’re on the right track. At least for me. I don’t see myself profiting from digital coins if I don’t believe in their purpose.
Being confident in my assets’ future value makes it easier to find the optimal tokens for my investments.
Furthermore, there are three additional reasons to invest in cryptos:
- To hedge your investment against the fall of the mighty Dollar. Not many experts propose that’ll happen but cryptos haven’t reached their full power spike yet.
- To support the social vision behind cryptos. Free and hard money across the globe sounds way different than government-issued paper to keep us engaged in an old-school society.
- To find a deeper understanding of the technology behind cryptocurrency. If you see blockchain as impressive, you can surely dive into it by studying cryptos.
Why Not Invest in Crypto?
As there are positive catalysts to invest in crypto, we’d find some negative ones as well.
As mentioned, many people aim to become instant millionaires via cryptos.
They invest at will, with little-to-zero knowledge of the digital field. They’d put their savings on single crypto and hodl it for as long as they can.
And with most of them, “as long as they can” ends right at the first substantial drop in their crypto’s price.
In short, they have no patience to await their possible profits. Which, as all crypto-heads know, is a shortcut to failure.
Another factor to keep in mind is FOMO. The Fear of Missing Out drives many confused investors to purchase crypto due to pure hype.
They see the value rising, many people talking about it, and they urge to get in the game. More often than not, without any clue how to proceed after they purchase the coins.
How to Act in the Crypto Market?
I’m not going to list basic crypto trading tips in this section. Not that they’re not important for beginners but this article focuses on something else.
I’m going to discuss the philosophical backup behind reliable trading tips.
In order to trade cryptos successfully, you need to understand how they operate. And what’s more crucial, to act in line with them to secure profits in the long run.
Why Construct a Diversified Portfolio?
Every expert advises to diversifying your portfolio. To invest in enough promising cryptos and avoid bankruptcy on all fronts.
This is true and effective. And it’s done because cryptocurrency is unlike any traditional asset.
Digital coins are more volatile, carry more charge, and induce more risk when trading.
Having over 10 cryptocurrencies in your portfolio lets you “breathe easier”.
Not worrying about a sole crypto’s performance calms your mind as an investor. Especially if you’re just starting with such endeavor.
Additionally, it’s much more realistic to hit a massive value spike when handling a dozen of cryptocurrencies.
Unlike the “one-hit-wonder” approach, you can have stability and still pursue greater profits. They won’t happen overnight but it’s much more likely they’d occur in the future.
Why Cryptocurrency Education Matters?
Entering any financial market without preparation can be devastating.
However, doing so with cryptos can be even more destructive.
As a still maturing market, cryptos are more unpredictable. A mistake in a crypto trade “weighs” more than an FX one, at least for me.
Even if you’re using financial advisors to guide your investment decisions, it’s essential you know the ropes as well. After all, it’s your investment. Your money, so you need to be at the top of your game to multiply them.
Luckily, you can gather knowledge from a myriad of sources. Most of those are online (duh), and easily accessible. Be it blog articles, expert reports, or cryptocurrency webinars, you can become a crypto connoisseur without an academic degree.
What’s amazing is you can even earn cryptocurrency while learning about it. Coinbase Earn is just one option to do so. However, I strongly recommend it.
Why Patience Is Crucial?
You’ve probably heard it a thousand times already – patience is a requirement for crypto investors.
That might be true for any kind of business, but cryptos do benefit heavily from patient investors. And vice-versa, he-he.
By hodling patiently to certain cryptos, you “insert” your trust in them. This helps developers and supporters in the long run. High acceptance equals an even higher adoption rate in the future.
Secondly, educated investors can predict and calculate value spikes in different cryptocurrencies. Holding them long enough serves for a constant profit-flow, given you have at least five different cryptos in your portfolio.
With an ocean of tips and tricks, trading cryptos might seem like a child’s game.
This is why you need to invest in crypto with the proper mindset. Not only to know the “rules” but to experience crypto’s nature in your own head. To “believe” in them, if you prefer that term.
A positive approach combined with actual knowledge and investment skills can go a long way with digital coins.
I wish you a steady tailwind!