Cryptocurrencies are a stunning technology and one of the best asset classes out there.
Over the past decade, cryptocurrencies have established themselves as a potential investable asset class. As you would know, the Bitcoin price has risen beyond imagination.
If you have invested in cryptocurrencies ‘Great’ because it could be one of the best decisions you could have made. But just because it earns high returns does not mean it is very easy to trade-in.
Cryptocurrencies involve high risk, and a small slip could result in losing your investment just like in the case of all high-risk investments.
So to succeed in crypto markets here are a few things you should not do after investing in cryptos.
1. Do Not Brag About Your Crypto Investments Online
Bragging is an innate human nature. We love to tell others about our successes. But when it comes to investing, it is best not to disclose the details to anyone especially online.
If you are a crypto enthusiast and want to educate people about it, there is nothing wrong about that. But bragging about the details of your crypto investments is hazardous.
Let me tell you how;
Suppose you posted a tweet unveiling the details of your investments, and all your friends clicked an encouraging like or retweet. Now, the internet is mighty, and this information can reach anyone who would take extreme measures to get hold of your assets.
In short, since there is no government control, the security of your investments is in your hands.
The more other people get to know about it, the more your wallet is put to danger. So, make sure your investment information is your own little secret.
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2. Do Not Monitor The Prices Constantly
It is best to treat your crypto investments, just like any other investment.
The crypto markets are indeed extremely volatile, and the prices may fluctuate every minute.
Many investors buy cryptocurrencies as a means of earning exuberant returns, and such volatility makes it possible too. However, price fluctuation can be very significant. When the prices fall, many users tend to panic and sell off the currencies at a lower price.
Monitoring the prices regularly unless you are a day trader, can lead to anxiety, allowing you to lose focus on your daily life.
If you want to track your investments, you can consider using apps to set up price alerts. So, you will be notified when the currency touches your target price.
3. Do Not Invest What You Cannot Afford To Lose
Once you have tasted the sweet returns from cryptocurrencies, it is natural to want to make the most out of it. With the excitement of multiplying wealth, many investors tend to go all-in with their savings to invest in cryptocurrencies.
Investing in cryptos is an excellent decision, but it is better to rethink the idea of wanting to invest everything and beyond what you have into it.
Cryptocurrencies are a very volatile market, and there are chances that you will make a great fortune. But on the other hand, if the market plunges, then all your investments will be red stained.
Consider investing in other assets along with cryptocurrencies too. This will reduce the exposure to the risk of loss from one investment alone. This approach is called asset allocation and diversification about which you can learn from here.
4. Do Not Keep Your Coins In Exchanges For Long Term
Most popular platforms such as CoinSwitch Kuber offer a free wallet to their investors after purchasing the currency. A wallet is an address in which your crypto is stored. It is better to transfer your coins to your own wallet if you intend to hold it for a long time.
Again, cryptocurrency is not yet regulated by the government.
Hence the owner is responsible for the security of their cryptocurrencies. Though the exchanges work consistently to provide a secure platform to hold your coins, there have been instances of wallet hacks in the past.
To shield yourself from such hacks, you may transfer your holdings to a private wallet and keep your private key safe. Remember that if you lose your private key, you will lose your investment.
5. Not Buying & Selling With Strategy
An exit strategy is nothing but a plan on when to sell your cryptocurrencies and entry strategy is simple buying. Many people who invest in the crypto space lack an exit strategy for when to sell their currency.
In other words, they do not know when to buy or when to sell. As soon as the price goes up a bit, they sell it and buy more at a higher price with the regret of selling soon.
No matter how small or big your investment is, it is essential to have your own plan on when to exit.
Some of these tips may sound quite obvious, yet many investors have lost a great deal of money because of such small mistakes.
Whether you have already invested or are planning to invest in cryptocurrencies, the points mentioned above will keep your investments in check.
[su_note] KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing. [/su_note]
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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