Cryptocurrency has gained traction recently, especially during the COVID 19 pandemic. When all the assets were down-performing, Cryptocurrency was reaching milestones after milestones.
The mad bull run of Bitcoin has caused quite an excitement in the investment sector. In the first week of 2021, Bitcoin’s price rose to almost $40,000. But soon the price dropped by 20%.
The rise and drop in Bitcoin’s price continued till November. On the 10th of November, Bitcoin reached its all-time high of $68,000. Since then, it has been lower. Market experts believe that this is the right time to invest. Bitcoin has always shown volatility going low before reaching a new all-time high. Experts believe that Bitcoin is going through that phase. To know more about the Bitcoin and Crypto trading market from experts, visit Bitiq.
Rules To Follow While Investing In Crypto
No matter how the people view Crypto, it has already been made into the market as one of the most trusted digital assets. Some early investors are reaping the benefits from its mad bull run.
The world of Crypto is indeed unpredictable, dynamic, and volatile. But it is these three things that make them perfect for investing. Because of their high volatility, investors can earn multiple times what they invested in a single day.
In fact, Cryptocurrency is the only industry that has given more millionaires than any other industry. This has attracted many investors to accrue losses. If you are also interested in investing in Cryptocurrencies, you must follow these rules to ensure you do not make any mistakes.
1. Only Invest What You Are Willing To Invest
The first rule of any investment, not only Cryptocurrencies, is to forget about your invested amount. The investment industry is based on prediction. Hence, there is always a 50% possibility that all your investments will experience loss. If you are mentally prepared to lose what you have invested, you will be able to make a logical decision, and even if you accrue a loss, you will be able to move on in life.
2. Don’t Invest Based On Hype
As we have already said, investment is all about having the right information at the right time. Why did we say that? There are times when markets fall into the trap of hype. When that happens, investors start following other investors without thinking digitally. Experts even call this event FOMO – Fear Of Missing Out. When something new happens in the market, every individual wants to be a part of it. For them, they feel like if they are missing out on this opportunity, they might be missing on making a significant profit.
So, without thinking and logical reasoning, they make their decisions. Don’t be like that. You will only be making a decision that you will regret later on.
3. Diversify Your Crypto Portfolio
It is important that you divert your investment. Buying a single asset means your profit and loss depend on the performance of that asset. So, if you make a profit, that’s good. But what if you make a loss? If that happens, you will lose all your capital investment.
To mitigate that risk, it is advised that you divide your investment into several portfolios. This ensures that you are not losing all your investment in one full scoop.
4. Start With Small Investment
When you know that a particular Cryptocurrency will perform in the future, despite knowing that, start with making small investments. Don’t invest everything you have.
Starting small helps you determine the market performance, and even if anything goes wrong, you will lose a small amount of your available investment.
Investing is all about making logical decisions. You can’t just wake up one day and decide to invest in Cryptocurrencies, especially when they are this volatile. To invest in cryptocurrency, you need to know how they perform in the market.
In addition, you must know what factors affect them. After you have gathered all the information related to the cryptocurrencies, you must invest only that amount you are willing to lose.