Investing in cryptocurrency is like riding a roller coaster. Let me help you deal with this so that the contents of your stomach remain inside.
They say that investing in cryptocurrency is like a slide in an amusement park. Perhaps I agree. There are moments of sincere joy when you scream at the top of your lungs and cry with happiness. And sometimes you cry because you saw the breakfast you just ate on your plate again.
I have already experienced all this in my relatively short period in investing. But that’s why she’s a crypt, right? Sometimes, “indigenous” and Lamba, and sometimes it’s just depression. But that didn’t stop me from investing. I have learned a lot in this area over the last year and felt the need to share my knowledge with my colleagues in the crypto shop, seasoned investors and interested newbies. It will be about sustainable investment in cryptocurrency.
Small disclaimer: this is just the opinion of the author. So don’t put the blame on me. Look at this as a friendly conversation.
#1: Not all crypto is volatile
Suddenly, yes! All you see in public or on Twitter is how Ethereum (ETH) has risen by about a million percent or Bitcoin has crashed to new lows. Every week, a new coin appears, reaching 1120% return on investment. This is true (to some extent). Cryptocurrency as a whole is probably the most volatile investment in the world. But among the thousands of cryptocurrencies available, there are those that have nothing to do with Elon Musk’s random tweets or important whales in costumes who decided to have a little fun (not real whales, of course, since it is obvious that catching wifi underwater is not an easy task). Some coins are pegged to real currency. Take Binance USD (BUSD) or even Tether (USDT) for example. They are pegged to the US dollar, and thus the value of each ranges from just 0.25 to 1, USD.
Tether and BUSD. Source: Binance
< a href="https://www.somagnews.com/shitcoins-what-they-are-how-to-identify-and-avoid-these-pitfalls/">Why is this so important?
Although these Coins can be even worse than a savings account when it comes to ROI (Return of Investment – return on investment ratio), this is a good opportunity to save profits and capital. Instead of worrying about converting ETH to fiat currency and then withdrawing funds to your bank account (you just got some brains and made some good money). You can just leave everything in BUSD or USDT, wait for the inevitable collapse and get a good discount to rebuy. To understand which is better, here is a link to a discussion on quora.
And now I don’t mean the university, where you have to solve everything that your matan teacher gives you. I mean education in the crypto-currency field. Knowledge about wallets, exchanges, what gas and NFT are. You don’t have to be an expert to start investing. But it is important to know which coins require a high transaction fee (gas) or which wallet will allow you to change or buy / sell currencies.
In addition, you need to be aware of important events, when it comes to the crypto you own. This gives you the advantage of knowing when to buy and sell. This does not mean that you will win every time (otherwise we would all have Lambs), but you can hedge your bets with more reliable support.
#3: Hype shitcoins are mostly bullshit
It is extremely important to invest in a crypto or even a specific coin if you believe in it. It’s easy to get caught up in the hype or just see insane profits from the new SHIB or other random coins. Whether you like it or not, this profit is followed by an inevitable drop that takes the value of these coins overnight. The same thing happened to me when I succumbed to the hype and invested in DOGE. Although DOGE still exists, it does not currently support any infrastructure, unlike Ethereum. And after the SNL fiasco, my investment, which grew to a decent amount, eventually went bankrupt. Once again: Explore the market yourself.
I agree that Ethereum, for example, time also collapses over time. But if you believe in the whole concept of blockchain and cryptocurrency as what defines the future, then you can understand why Ethereum is so popular and in the long run the trend will more or less always go up.
Let’s say you followed all of the above guidelines and successfully invested in a promising crypto-currency that is supported by infrastructure and that will undoubtedly move up the career ladder. You made a solid profit, but you keep saying: “A couple more percent, and I will sell it.”
There is nothing wrong with this, but remember that all crypto is suffering from the inevitable rollback. Nobody likes to see their balance in red.
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My advice: get tied up with a certain percentage. For example: let’s say my percentage is around 00%, i.e. when my balance increases by 00%, I sell most of my assets. This is just an example. Another example of the same scheme is the withdrawal of capital as soon as the portfolio grows, say, by 25-05%. Let percentage do all the work.
When the market is FOMO and everyone wants to maximize profits, it is impossible to predict the market correctly. So just take profits and be happy.
This interest theory also applies to the consequences of crashes, for example, you can sell your assets immediately after losing about %.
A small note: specific percentages should be determined by you to the extent that you are willing to risk (how strictly you are willing to handle your money). You can start small and slowly move up to the big.
I believe in crypto and its future use. But that doesn’t mean everyone believes. The value of a cryptocurrency is literally how much people believe in it, and we all know that belief never stops fluctuating. While it is impossible to ignore returns over 618%, it is also difficult do not pay attention to sharp collapses. The whole industry is still in its infancy, so it’s best to only invest money that you can afford to lose. nor hot. The amount that, in case of loss, will not have an impact on everyday life.
There are people who live on their invested savings in crypto. You don’t have to be like that. This is not just an unstable story, but also one where for every success there are many failures. But if you want to take the risk, then why not. But this is highly not recommended. Play smart.
These are my 5 tips. You can find many more. But I feel these are the most important. I know it’s hard to put emotions on the back burner when investing in cryptocurrencies. At first, you will look at your balance on the exchange / wallet day and night, hoping to fly into space or avoid a not-too-soft landing.
Don’t give up. Give yourself some time. As you begin to accumulate experience, instincts will automatically develop in you and it will become easier to control emotions. Such is life, isn’t it?
Invest responsibly.
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