There are multiple common mistakes that newbies make all the time, which ultimately blow their crypto investment portfolio. It is important to be careful and avoid all mistakes. If you are a newbie who doesn’t know about mistakes that should be avoided, let’s discuss them. also, in order to get the latest updates about new software and the effect of bitcoins on cryptocurrencies
Buy at High, Sell at Low
Most beginners make the major mistake of buying crypto coins like bitcoin when the price is high and sell them at low. This is the exact opposite of what investors should do. To earn massive profits, investors must buy bitcoins at low and sell them when the price has reached the sky. As you know, the crypto market is volatile, and the prices of bitcoin and other cryptocurrencies keeps on changing in minutes. While you look at the chart and prepare yourself to invest in crypto, you must catch that train or else it will leave the station, and you will lose the opportunity.
Most beginners face this issue that they invest money in cryptos and then watch big pullbacks which scare them, and instead of holding, they sell their investments and lose money. This trend keeps on continuing because this is what the crypto market is. Therefore, you must choose to buy at low and sell at high and train yourself about everything that may happen in the crypto market. Take risks by looking at charts and patterns but never take risks that cannot guarantee you good profits.
Expecting 100x profit
Another common mistake that investors make is when they expect to get 100x profits. Some investors even make this their main investment strategy. Learn that it is good to do speculation and know that you must never invest all your funds in one cryptocurrency as this can cause you a major loss. Beginners will lose money with the strategy of expecting 100 x profits. Surely bitcoin goes up fast, but it is a fact it comes down as fast as it goes up. You must set a profit and loss limit and not get greedy when prices go up beyond your limit and must set a loss limit that will prevent you from losing your funds.
It would help if you searched the profitable coins in the long run and must avoid researching about coins that aren’t profitable. Instead of spending time and effort searching coins and watching their market, choose the coins that have good market capitalization. The best alternative in this strategy is to buy and hold crypto coins for the long term. This has made many investors millionaires.
Invest in cryptocurrencies because it’s inexpensive
Beginners make the mistake of investing in a cryptocurrency because it’s inexpensive. Investors must consider the unit price of bitcoin or other cryptocurrencies and consider the market capitalization of each cryptocurrency. Before investing in a crypto coin, compare all the cryptocurrencies and consider whether they can surpass the value of bitcoin in the future. Make sure to think about various factors other than the unit price of a cryptocurrency and avoid investing in any cheap cryptocurrency. It will never offer you benefit, and even you will lose the money you invested in such cryptocurrency.
No diversification
An example can understand diversification in terms of cryptocurrencies that you must never put all your eggs in a basket as it will break the eggs and basket. Even if you invest in cryptocurrencies by clearly understanding the market and other factors, it might be possible that things don’t go your way and things that you assumed aren’t right. This is why diversification is important, and you must diversify your investments thinking that something may go wrong. There are few ways in which you can diversify your investment that include:
- Instead of buying only one cryptocurrency where you have to be 100% sure that you will make a profit, it is better to lower the risk of losing all your money by diversifying your investment in different crypto assets.
- Everything may seem right, and you get confident in one cryptocurrency. You may choose to invest like 65 percent of your investment portfolio in Bitcoin, and then you can divide the rest and invest 20 percent in Ethereum and the rest 15% in other crypto coins that you think are performing well in the market.
Investments that are either made in the stock market or crypto market must be diversified as there is no guarantee about bitcoin prices that fluctuate a lot.
