Investing in crypto or trading crypto can be risky if you’re new to the crypto world. Here are 10 mistakes you should avoid making if you wish to become a pro in the crypto space.
You are new to the crypto space and super eager to dive right into investing and trading. But before you get into the nitty-gritty, we want to make sure you know about the most common mistakes crypto beginners make and how to avoid them, so you can start your journey on the right foot.
1. Don’t share your private keys EVER
If you give someone your private keys it’s like giving someone your password to your bank account. If you give someone access to your account all your funds can be stolen. Only share your public address in order to receive transactions. It is like the IBAN of your bank account. But NEVER share your private keys. Keep it safe and secret at all times, if you lose your private keys, you will also lose access to and the ability to control your crypto.
2. Don’t leave all your crypto on exchanges
The past shows that cryptocurrency exchanges are a big target for hackers and therefore many people have lost all their money. As long as you leave your crypto assets on the exchange you don’t own them. If you need to have parts of your crypto holdings on exchanges, for example for active trading, then make sure to use secure exchanges (for example: valid HTTPs, offering two-factor authentication, cold storage of user’s funds etc.).
3. Don’t neglect additional security measures
Even if it takes a few more seconds to log in to your accounts, always use two-factor authentication. We recommend using Google Authenticator.
Another good tip is to always use bookmarks and never click external links.
4. Don’t fall for scams
Even though the crypto world is not the wild west of the financial industry anymore we still have some work to do until it is fully regulated. This leaves many frauds with the opportunity to steal all the hardworking money from honest and innocent people. Remember to always be skeptical if someone offers you free or easy money or in general unknown people contact you privately on social platforms like Telegram, Discord, etc.
5. Don’t think crypto is easy money
There is no such thing as easy money. Especially when it comes to trading crypto or any other financial asset like stocks or shares. It takes a lot of effort and hard work to be successful in the financial market.
6. Don’t invest more money than you can afford to lose
This is the one golden rule of investing that you should never forget. The crypto market is very volatile and no one can say for sure what is going to happen. So before you throw all your retirement money into crypto, think about how much money you are willing to lose if an investment goes wrong.
7. Don’t buy a coin because it is cheap
One of the common investment tips is to sell high and buy low. But be careful, only because a coin is cheap doesn’t mean it is a good investment. In many cases there is probably a reason why you can buy some crypto assets at a lower price. Also note that the price is dependent on the circulating supply and token economics. This is why two coins, one with a small price and one with a large price, can have similar market caps.
8. Don’t go all in
It is important to diversify your portfolio and not put all your eggs in one basket. It is very tempting to throw all your money into that one single project, you are really passionate about and think this is the one that makes you a millionaire. But no one in the crypto space can tell you with a hundred percent certainty that you won’t lose all your money at once.
9. Don’t be impatient
Being patient is key in the crypto market. Many people come into the space to get rich immediately and don’t have to think about money anymore. Most of the time reality looks different. It is difficult to not listen to the noise in the crypto market and panic sell. Instead stick with your own strategy and be patient.
10. Don’t FOMO (fear of missing out)
Who hasn’t had that feeling before when your coworker tells you about the next big deal and you feel the urge to jump on that bandwagon immediately. One of the best pieces of advice is to leave your emotions out of investing. Of course it is easier said than done but it is important to do your own research on crypto projects and invest based on facts and not feelings.