The most common mistakes to avoid when buying crypto
With experts agreeing the cryptocurrency market is on target for a $1 trillion valuation, it’s a good opportunity to make your break by buying and selling crypto.
To help keep your investments as secure as possible, we’ve created a list of five common mistakes to avoid when taking the plunge into crypto.
NOT LOOKING AT THE LONG TERM
Cryptocurrency is one of the most profitable investment options, but also one of the most volatile.
When Bitcoin loses or gains value, other cryptocurrencies tend to do the same. This means that even if you’ve invested in a wide range of cryptocurrencies, a drop in Bitcoin's value will impact your whole cryptocurrency portfolio.
Keep your eyes on the bigger picture. Remember that cryptocurrency should only be one string of your investment bow – keep your eyes on the value of more stable, traditional currencies. Make sure your whole currency investment portfolio stays as diverse as your cryptocurrency portfolio.
FORGETTING THAT KNOWLEDGE IS EVERYTHING
Although you can pick up useful pieces of advice from YouTube or Twitter traders, it’s important to fully understand any new cryptocurrency you buy.
Before you invest in a new cryptocurrency, make sure you understand the particular problem it’s trying to solve, who has invested in it and who built it. Never invest in a coin blindly based on the tips of a 'Crypto Guru'.
SNOOZING AND LOSING
Things move quickly in the crypto-market, especially when compared to a more traditional institution like the stock exchange. If you’re looking to make the most of your investments, checking daily isn’t going to cut it – you’ll need to be closer to checking every hour.
An easier way to keep on top of your promising investments is to use your watch list. If you’re waiting for a security to reach USD$20 and it’s been hanging around $15, set an alert for $19.50 and you’ll never have to worry about missing that potential profit.
A Skrill wallet allows you to set up price alerts, meaning you don’t have to worry about waiting around and clicking refresh.
TRYING TO GO IT ALONE
Once you’ve understood the fundamentals of a new cryptocurrency, remember that online crypto-communities can be helpful. Ask for advice, discover new trends and sound out new opportunities in a forum of like-minded people.
Of course, the communities you’ll want to join will depend on which currencies you’re buying. Most reputable currencies have dedicated pages on Reddit and Slack, which are great places to start familiarising yourself with the basics.
GIVING IN TO FOMO
The “Fear Of Missing Out” (FOMO) is a powerful psychological response that regularly creates losers on the crypto-market. You’ll eventually find yourself saying “If only I’d invested in Skycoin last month”. Unfortunately, the only antidote to this way of thinking is discipline.
Remember, there will be other opportunities for you to make money, so don’t jump into an investment too quickly just because you missed out last time.
Before you can get started with crypto, you need to decide where to buy your cryptocurrencies. With a Skrill digital wallet you can convert over 40 fiat currencies to cryptocurrencies instantly – ideal for beginners and the initiated alike.