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5 common mistakes when starting with cryptocurrencies
The world of cryptocurrencies is a very complex and hostile world, in which you only depend on your own knowledge and common sense. When you first enter this chaotic world, there are people who often make mistakes. And, mistakes in the cryptocurrency sector are often paid dearly.
Today we are going to be talking about what are the 5 mistakes that people usually make when starting with cryptocurrencies. If you are just starting out, this information will be very useful to you. Even if you already have some time, review these mistakes that you may also make.
5 Mistakes People Often Make When Getting Started With Cryptocurrencies
1. Not taking the choice of a wallet seriously
This is a fairly common thing that newbies and not-so-newbies often do. Choosing a wallet is extremely important, since this is the place where your cryptocurrencies will be stored.
Imagine this as choosing a bank, when you are going to open your first bank account you are likely to do some research to see which bank is best for you. The same thing happens with wallets, not all of them are the same, so you should take your time to choose.
There are some wallets that are quite good and interesting, but there are also others that are not so good or charge very high fees. You should not go by what others say either, do your own research and decide for yourself which one best suits your needs.
2. Invest in a single crypto asset
Cryptocurrencies are a very volatile market, currencies can go up or down sharply from one day to the next. That is why one of the worst decisions you can make is to invest in a single cryptocurrency. Even if the coin looks very promising, you should avoid doing it.
If you invest all your money in a single currency and it goes down, you are going to lose a lot of money, on the contrary, if it goes up, you are going to win a lot of money. The ideal in this market is that you have several currencies, in this way, in the event that one goes down, you will not lose so much money.
There are many currencies in which you will be able to invest in a relatively safe way. An example of this is Bitcoin, Ethereum, Litecoin, Cardano and a few more. So you have several options to invest your money.
3. Buying a coin just because it's "cheap"
There are coins that can have an extremely low price or, for example, there are some that with just one dollar you can buy millions of them. This may seem like a tempting business, especially since in the event that its price goes up, you can easily become a millionaire.
Sounds good, doesn't it? This is what many newbies think, however the fact that such a low price can be a red flag. Many coins today are considered as " shitcoins ", this means that they are coins without any use.
This type of currency can very rarely give you benefits, since unless it becomes popular, people do not usually trade with it. In this case, investing in this type of currency is a great risk that you should not take.
4. Buy coins with low liquidity
Liquidity is a key factor for decision making when buying a cryptocurrency. Liquidity is the amount of money that supports a currency, the more liquidity you will be sure that you will be able to sell.
However, you should keep in mind that a currency with low liquidity is going to be very difficult for you to sell. In addition to being a risk and an indication that something is not right with the currency.
The ideal is to invest in currencies that have a good amount of liquidity, this means that the currency is traded and you can keep your money safe.
This is not an indication that the coin is safe, since there have been cases where even having good liquidity, they end up falling. So, it is very important to never let your guard down in the world of cryptocurrencies.
5. Invest without a clear strategy
Having an investment strategy is vital to be able to obtain benefits with cryptocurrencies. To earn money you need to buy low and sell high, this is the basics, but it is not as simple as it seems.
To be able to do it optimally, it is necessary to have a good strategy. This means that you must research and learn so that you can make a good investment.
Learning about strategies is key and you can do it through online courses or by reading a lot on the net. On YouTube there are a lot of investment strategy courses that you can take for free.
