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As a beginner, investing in cryptocurrency can be somewhat of a minefield, especially when you consider you need to mine the currency to find it. Mining in cryptocurrency refers to the process of validating transactions and adding them to the blockchain, which is the public ledger of all transactions. The sector is, like many other things in life, including simply opening an email, filled with risks and mistakes that can cause you to not only lose your investments but also put you at risk of a host of other problems, including identity theft.
But that shouldn’t discourage you from investing in crypto. Instead, view these mistakes as a valuable learning curve. Understanding how not to invest will guide you towards safer investing and the assurance that your money is secure.
These are some of the more common mistakes new crypto investors make.
Falling for Big Promises
If it seems too good to be true, then it likely is. If someone is promising you massive returns, such as doubling your investment in a week or making you a millionaire in a month, it’s likely a scam. There are no guarantees cryptocurrency will make you rich, and these types of investments are highly volatile and experience massive losses on a daily basis. So if someone is telling you they can make you rich via Bitcoin, then it’s highly likely the only person getting rich off your money is them.
Not Using Reputable Platforms
Hand in hand with the above point, scammers use fake platforms to trick those who aren’t as clued up in crypto into parting with their money. However, if you’re diligent in your research when choosing your platform, you can avoid making a massive mistake. By finding the best crypto trading platforms and not just using the first one you come across or pops into your DMs, you can feel more informed and prepared.
Not Tracking Investments
If you’re not tracking your investment decisions or staying on top of your crypto portfolio, you will likely not make the right decisions and be at risk of losing vast amounts of money. You need to make sure that you are using a crypto management platform to track all of your investments, transactions, and purchases and the market as a whole so you can make better decisions. Find the Best Crypto Management Platforms to help you monitor your investments and give yourself the best chance of crypto success.
Short Term Thinking
We’ve all seen the headlines where the value of any cryptocurrency drops massively, giving people additional worries about their investment. However, crypto is a game that should be played with a long-term strategy. If you’re in it, you need to be in it for the long haul, meaning that you shouldn’t be worrying about cashing out when the market shows the slightest sign of not going your way. This type of short-term thinking can cost you more money in the long run and only serves to increase the fees you’re paying for any transactions you make.
Forgetting About Fees
Carrying on from the above point, every single transaction occurs with fees. If you aren’t factoring this into your investment budget, then it’s likely you’ll spend way more than you want to or are comfortable with. There are blockchain fees, platform fees, exchange fees, and more, and these can all add up quickly. For example, buying crypto with a credit card can incur a 3% surcharge fee and a 1% transaction fee. This is something you shouldn’t overlook before starting your investment journey.
