Cryptocurrency attracts a lot of beginners because of its seeming accessibility. In reality, cryptocurrencies are one of the most complex assets you can trade. Even people in crypto will admit that they don't know why they’re behaving the way they do in some cases. This is why you should be spending more time on research instead of jumping on the crypto craze out of fear of missing out. Here are some of the biggest mistakes people make when they first invest in crypto.
Choosing the First Exchange They Come Across
When people start investing in crypto, they often assume that it's regulated just like any financial instrument, but that's not the case. Exchanges operate in a grey area and are nowhere near as tightly regulated as traditional exchanges.
This is why learning about an exchange is essential. You should check the exchange’s history in detail to see whether it had issues in the past. You have to check what type of security measures they have and how assets in their custody are stored. You should also get as much social proof as you can.
If you want to compare exchanges fast, use a site such as BestBitcoinExchange.io. You’ll get a quick view of some of the top exchanges and all the exchanges on their list have been proven, so that’s a good place to start.
Putting Everything on Bitcoin
This is one of the worst mistakes that you can make. Bitcoin could become a great store of value in the future, but if you want to make big profits, we’re afraid that the ship has sailed a long time ago.
Instead, you should be looking at more obscure coins and projects that could have some potential. You should also have different types of coins in your portfolio. You should have transactional coins, platform coins, and a few stablecoins so you can keep your assets liquid and have access to crypto markets without all the volatility.
Not Learning How to Trade
Another mistake a lot of people make is relying too much on commentators and not learning how to trade themselves. You can never fully trust these commentators, as many of them are personally invested. This is why so many of them will either gloss over bad news or purposely ignore it.
You will need to start to at least learn how to read a candlestick chart. Know what different figures represent and how to act on them. We also suggest you start getting familiar with technical indicators like the Relative Strength Index and learn how to perform technical analysis. Just doing these two things will put you way ahead of the pack and allow you to make better decisions. You’ll also be able to verify any advice you have online.
Crypto investing is very serious, and you can't expect to watch a few YouTube channels and think you have it all figured out. It takes a true understanding of how markets work, and lots of research and dedication.
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