Investing in cryptocurrencies? Beware of these five mistakes | #phishing | #scams

Cryptocurrencies have quickly made a position among avid investors, slowly capturing a growing share in the crypto market. The increasing number of investors in the playfield has given rise to a wave of young investors who have jumped on the crypto bandwagon. With a vast knowledge from the internet and a large appetite for risk, these investors have quickly made crypto the next big thing in the market.

Despite the booming popularity, cryptocurrencies are deemed a risky form of investment due to many factors, with a lack of regulation dominating the list. These factors often prohibit many traditional investors from venturing into the crypto world. However, staying cautious of a few blunders can help even novice investors avoid questionable crypto investments.

INTERESTING READ: Why is Gala (GALA) crypto rising?

On that note, here are a few mistakes that most investors should be wary of before making investments in crypto.

Trusting fake cryptocurrencies

As scary as that sounds, cryptocurrency investments have been subject to numerous scams in the recent past. While such scams were not directly related to the functioning of these cryptocurrencies, they largely involved dubious organisations coming up with their own fake cryptocurrencies. Other scams include imposter giveaway scams, phishing scams and even extortion scams.

Often, individuals are attracted to fake cryptocurrencies because they see the possibility of investing cheaply at an early stage and raking in spectacular returns once the cryptocurrency takes off. The useful idea is to follow reliable and known websites with solid backing, which can allow crypto enthusiasts to utilise gains from the market without worrying about being cheated.

DO NOT MISS: What role does blockchain play in reshaping the banking industry?

Investing without proper research

Like most other novel skills, investing also requires some background homework before diving into the market. For instance, someone who wishes to start gardening may find it handy to read a book on the topic, or someone who wishes to learn the piano may contact a teacher or watch lessons on the internet. With abundant knowledge available on the internet, budding investors need to venture far off to quench their thirst for knowledge.

Investors can understand how crypto experts manage their portfolios to get a basic idea about the market. Apart from that, it is crucial to read the whitepaper of a cryptocurrency and keep track of all the latest news on that crypto to fully understand its viability as an investment option.

Having FOMO

FOMO, or simply the fear of missing out, is common among widely hyped markets such as crypto. With new developments quickly shaping up in the crypto world, many investors are left spoilt for choice. In such a situation, it is common to fall prey to the fear of missing out and investing in those cryptocurrencies that are just creating a lot of buzz.

However, not every cryptocurrency can be a good bet, simply because it helped someone else gain significant returns on their investment. Thus, it is crucial to first put your interests and then take your own portfolio into consideration before choosing multiple cryptocurrencies.

Taking a short-term view

New investors often make the mistake of viewing the market from a short-term perspective. Deciding to exit the market from a fear of losing out on gains in the future can be a common misconception. The crypto market is still evolving and is in a relatively nascent stage. Thus, investing in a cryptocurrency is sure to be an unpredictable ride.

Investors can obtain higher returns in the long term.

Instead, investors can hold the purview that cryptocurrencies are long-term investments. Due to their highly volatile nature, what may seem to be today’s trend can be quickly reversed in the coming days. Thus, jumping the gun in decision-making can prompt investors to miss out on substantial returns.

Forgetting the stop-loss method

Crypto investors are often passionate about their investments and can be fooled by their own judgement. It is best to be practical in the world of investing and avoid making decisions based on ‘hunches’ that are not backed by reasonable factors. Sometimes, investors take the motto of “Hold on for dear life (HOLD)” too seriously and land in a pile of losses.

What is a stop-loss order and how it is placed?

The stop loss method is a common way of preventing such a scenario. It seems imperative for investors to acknowledge their bad decision and move on from a cryptocurrency once it reaches the stop loss limit. Equity investors largely use the same method.

Bottom Line

Being too fearful or careless about one’s crypto investments is a surefire way of landing in trouble. Investors must take a balanced approach, fueled by abundant knowledge and high vigilance, to lead in their crypto journey.

ALSO READ: Russia-Ukraine crisis: How crypto mining will get impacted?

Risk Disclosure: Trading in cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory, or political events. The laws that apply to crypto products (and how a particular crypto product is regulated) may change. Before deciding to trade in financial instruments or cryptocurrencies you should be fully informed of the risks and costs associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Kalkine Media cannot and does not represent or guarantee that any of the information/data available here is accurate, reliable, current, complete, or appropriate for your needs. Kalkine Media will not accept liability for any loss or damage as a result of your trading or your reliance on the information shared on this website.

Original Source link

Leave a Reply

Your email address will not be published.

fifty four − = forty four