Someone Lost $17,000 in Cryptocurrency. Here’s How to Avoid My Mistake

Cryptocurrency markets are volatile — even famous investors like Warren Buffett consider them a gamble rather than an investment. But that’s not stopping the world from investing. In fact, there are now more than 1,500 types of cryptocurrency available on various exchanges. Market volatility is one of the reasons why so many new investors will fail to make money from their crypto investments. In this article, you’ll learn about the top mistakes people make when investing in virtual currencies and how to avoid them.

Don’t invest more than you’re willing to lose.

When you invest in cryptocurrency, you’re essentially putting money into a start-up. Just as with any new company, there is no guarantee that you’ll see a return on your investment. In fact, the majority of new businesses fail within the first year. Investing in cryptocurrency is risky, and you should only spend what you’re willing to lose. If you’re not willing to lose the money you put into cryptocurrency, you’re better off not investing at all. If you’re too scared to lose the money you’ve invested, you’re likely to make irrational decisions when it comes to selling. Invest only what you can afford to lose, and you’ll be less likely to make rash decisions when the market takes a turn for the worse.

Only invest in things you understand.

It’s important to understand what you’re investing in before you put your money into it. You don’t need to be an expert in cryptocurrency; you just need to understand the basics of how it works. You should know how a cryptocurrency gets its value, what it’s being used for, and what its strengths and weaknesses are. If you don’t understand how your chosen cryptocurrency works, you’re more likely to make investment mistakes. Invest in only the things you understand, and you’ll be less likely to make rash decisions when the market dips.

Don’t trade based on news and rumours.

Cryptocurrency trading is a common mistake among new investors, but it’s a mistake nonetheless. Trading based on news and rumours is extremely risky. You never know if the rumours are true, and even if they are, you don’t know if they’ll have an impact on the market. Investors who trade based on rumours can lose a lot of money in a very short time. If you don’t want to make this common mistake, you need to stay focused on your investment strategy. Never trade based on rumours, and always keep in mind that the cryptocurrency market is highly unpredictable.

Don’t be afraid to take a loss.

Taking a loss is a lot easier said than done, but it’s an important part of being a successful investor. If you’re only investing in cryptocurrencies that you’re certain will be successful, you’ve probably missed the opportunity to make money. There will always be times when your investments drop in value; that’s just the nature of investing in volatile markets. Taking a loss when it’s appropriate can help you avoid larger losses in the future. Don’t be afraid to sell an investment that’s dropped in value, and you’ll be less likely to make the mistake of holding on to an investment that’s losing you money.

Be careful who you trust.

Cryptocurrency investors are a community — they’re passionate, empathetic, and welcoming people. However, there are dishonest people in every industry. Don’t fall for scams or trust people unconditionally just because they’re part of the same industry as you. Always conduct thorough research and try to get as much information as possible before trusting someone. You should be wary of investing advice from people you don’t know or can’t trust. You don’t want to make investment decisions based on false information. If you’re only listening to advice from people you know and trust, you’ll be less likely to make a mistake based on bad advice.

Stay up to date and learn before investing.

Finally, the most important thing you can do before you invest in cryptocurrency is to study up on it. Don’t just read one article — read as many as you can. Use forums and subreddits to interact with other cryptocurrency investors. Participate in conversations, and ask lots of questions. There is no better way to learn than by actively participating in the cryptocurrency community. You can also read books and articles written by experts in the field, or watch YouTube videos from trusted sources. If you’ve done your research and you’re still sure that cryptocurrency is a good investment, you’ll be less likely to make a mistake once you invest.