Crypto space is growing day by day and wherever you go, you can hear someone discussing decentralization. Everyone wants to invest in crypto but for some reason, they seem negligent due to a basic objective- a lack of investment knowledge. These investing tips for beginners will break the barriers and let you into the crypto space independently. Learning investing for beginners is a great way to start your DeFi journey.
At the same time, you should know how to invest money wisely. Every day, many new coins were emerging into the market so knowing about all coins is like searching for a raindrop in the ocean. So knowing a few crypto projects before investing will give you a clear idea about them.
This ultimate guide gives you a detailed explanation of do’s and don’ts in crypto investing for beginners. By knowing this, you can make sure about the project and decide how to invest wisely.
Things to Do and Not to Do in Crypto Investment as a First-Timer
5 Dos:
- Don’t go with others
- Look for dips
- Buy from a trusted exchange
- Learn risk management
- Hold your coin
Don’t Go with Others
This is one of the best investing tips for beginners. Understand the true aim of a certain cryptocurrency, and only invest if you believe it is a smart project with emerging techniques.
Always do your research before investing. This way, you’ll know exactly what the project is about, how it operates, how long it will last, and so on. Knowing each detail about the project will enhance your confidence before investing in it.
Look for Dips
Once you decide to invest in crypto, choose a few coins and analyze its market. Know its bull run and bear phase. Always try to invest in a coin when it falls in price. That’s the best way to invest because once the price has been raised you will gain profit.
When you invest money in peak time, it will start to fall soon. As you know, crypto is a volatile asset, no one can predict when it goes up and down. So always try to invest when it dips. Even the loss won’t affect your investment.
Buy from a Trusted Exchange
The next pro tip for beginners is to choose the best exchange to buy coins. Many people will have the habit of storing their coins in an exchange wallet rather than moving it to other wallets. This puts your cryptos at a security risk.
Do you remember the FTX exchange? One of the top exchanges has fallen by its founder Sam Bankman-Fried. So beware about the exchange before you try to invest and don’t go with newly opened exchanges. Check the exchange liquidity and then invest in it.
Learn Risk Management
Invest what you can lose. This is one of the best investing tips for beginners to keep a hold on your base investment. You can follow many methods on how to invest money wisely but at the same time know that you will not succeed all time. The probability of success in crypto investment is 50:50. i.e., either you can make a profit or a loss. So before investing money, have a mindset that you are not going to succeed for sure and you can manage the loss.
It will help to overcome the situation and you can handle the financial status too without affecting your routine. Before you invest a penny, know that your funding will be gone until it comes back to you. This mindset will make you relax and enjoy your profit one day.
Hold Your Coin
Once you invest, think there is no way to go back. Try to HODL your coin for a longer time frame. This helps to analyze your coin’s market cap like when it will go up and when it falls. After this analysis, you can decide whether to withdraw or HODL for some more years.
The best example is Bitcoin. Once a man sold two Bitcoins to buy pizza for his son. Now the price of one Bitcoin is $22,600 and last year it reached a new all-time high of $68,789. So get back from the coin as soon as possible once it’s fallen, if the project is good soon it will go up. Do research, invest, and HODL it.
5 Don’ts:
- Don’t follow social media
- Don’t go with FOMO
- Don’t invest in new coins
- Don’t share your private keys
- Do not keep investment in exchange
Don’t Follow Social Media Hype
Don’t go along with the social media groups and hype. Do your research before you start investing. If you follow a group, it is like a goat following its herd. If someone made a mistake, you will also do the same. Always have your skills and ideas before investing.
Never go with social media influencers for financial advice. Some will analyze the market and let you know what is exactly happening in the crypto market and while some promote products on a sponsored basis.
Don’t Go with FOMO
Many people buy crypto in a hurry to avoid the fear of missing out (FOMO) but don’t believe in this concept. Stay calm and buy the coin which has good backup team members, a clear project concept, and what they are delivering to society. More than learning the best investing tips for beginners, it is also necessary to master the art of unlearning when things don’t work out the way you expect it to be.
Don’t Invest in New Coins
As you know, on a daily basis, many coins are coming into the market with some kind of concept to solve current problems in society. Today, there are over 25,600 cryptocurrencies in circulation. Even the backup of the coin is strong but you can’t invest as it is.
Facebook tried to introduce the Diem coin in the market and it has many user-friendly advantages too but crypto whales of other coins never let the coin into the market. So don’t go with new coins instantly, at least the coin should be in the crypto market for a few years, then only you can invest in it.
Don’t Share Your Private Keys
In banking, people are advised not to share their OTPs with anyone likewise in crypto don’t share your private keys and seed phrases. As the name shows, it is the key to your investment.
When you share your private key or seed phrase with others, they will easily transfer your investment to their wallet without any footprints. You can’t even find to which account it has been transferred. Be careful before saving your private key and seed phrase.
Do Not Keep Investment in the Exchange
Once you invest in the coin, make sure to transfer it to a coin wallet or other third-party wallet like trust wallet, etc., it is not advisable to keep your money in exchange. Small bugs also make it easy for people to loot your money. Once you buy your coin from the exchange, transfer it to your cold wallet if possible.
Final Thoughts
These investing tips for beginners will help you to understand how to invest money wisely. No matter why you want to make investments in cryptocurrencies, you must first understand what they are all about. These dos and don’ts will assist you to know how and when to invest, how to protect your crypto, and what are the benefits of it. As with traditional investment methods, you must not go back with the hype. Instead, do your research and invest only in assets that you are confident in.
