Did you know that 13% of Americans traded cryptocurrency in the past year? By comparison, 24% of Americans traded stocks during the same period. This shows you the popularity of buying and selling crypto.
BUT is it a good idea to include crypto in your investment portfolio, especially if you are a newbie and have no idea what it’s all about. As with all investments, the more you avoid traditional mistakes, the less risky the investment becomes. Read on for 5 mistakes in crypto investments that could plague you as a newbie investor.
1. Investing In Cheap Crypto Coins to ‘Hit It Big’
Too many people purchase cheap coins that are worth pennies hoping that they will go to $10 or $50 and make them millionaires. This happens but rarely. It’s more logical to invest in coins that you know something about, that you’ve researched, and that is recommended by other investors you trust.
2. Not Owning a Hardware Wallet
A hardware wallet is not connected to the internet, which means, that it’s less likely that a hacker will get access to it and steal all your coins. It’s imperative to store all your cryptocurrency in a wallet, especially if you have more than $500. This way no one will get access to them unless they steal your physical device AND your passphrase.
3. Treating Crypto as If They Were Shares
Crypto is not the same as investing in stocks. That’s something that quite a few newbie investors get wrong. You do not have ownership in a company if you invest in cryptocurrency, nor do you receive dividends. Also, the company can profit without you receiving any benefits, even if the coin itself goes drops.
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4. Not Diversifying Your Portfolio
Invest in at least 5 different crypto coins to ensure your crypto investment strategy is diversified enough. This way your crypto investment portfolio won’t be affected too crazily by the ups and downs of the market. And your return on investment should stay pretty steady.
5. Overtrading As a Newbie
You are probably excited to get started as a newbie crypto investor. That’s understandable. But despite this, it’s not a good idea to trade 20 or more times a day in the beginning.
Cut it down and do one or two trades while you get your feet wet. This way you can learn about the market without losing the shirt off your back. And you won’t get frustrated by the market and give up altogether which would be a pity.
Mistakes in Crypto Investments Are Absolutely Avoidable
You might be thinking that buying and selling crypto sounds too complicated and you don’t know if you should even try. That’s the wrong way to think. Everything seems crazy scary when you first get into it.
But investing in crypto can be quite lucrative for you if you avoid the mistakes in crypto investments mentioned above.
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