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As the cryptocurrency market is extremely volatile, it is always smart to start small
Cryptocurrency has become very popular among investors. Not only has the crypto market seen an increase in investors, but it has also started to gain acceptance in many organisations as an alternate mode for payment to fiat currency. Many top companies have begun to offer their customers the option of paying for their products using cryptocurrencies. However, despite all this cryptocurrency is still a highly volatile asset class that is also decentralised. So, it is important for all investors to keep the following points in mind before investing.
1) Research thoroughly
As is the case in all money-related matters, it is important to do an adequate amount of research before you invest. Read all about the different types of cryptocurrencies before picking the one you choose to invest in. Read all there is to know on blockchain technology to understand how the cryptocurrency market functions.
2) Verify all information
As the crypto market is decentralised and unregulated, there are several scammers and fraudsters aboard. Do not blindly fall for investment schemes that promise great returns. Always verify before trusting.
3) Start small
As the saying goes, “never put all your eggs in one basket”. It applies to investments as well. As the cryptocurrency market is extremely volatile, it is always smart to start small. And pick only one type of cryptocurrency and stick to it until you feel confident enough to understand the market. Invest small amounts of money.
4) Rely on your own research
The cryptocurrency market is new for everyone. So, do not fall for the investment strategies of so-called market experts or social media influencers. Rely on your own research and chalk out your own strategy based on your personal finances.
5) Patience is key
The volatility of the cryptocurrency market knows no bounds. So, it is important to remain patient despite all the swings that occur. Keep your cool always as it will help to make good decisions.
6) Create a new email ID
All cryptocurrency trades take place via various platforms that require you to create an account using an email ID. It is always best to create a separate one only for cryptocurrency trades and investments. This is to avoid any risk of a data breach.
7) Understand cryptocurrency wallets
Cryptocurrency can be stored in an online wallet as well as an offline wallet. For new investors, an online wallet is best. However, it runs the risk of being hacked. Read up on both wallets and choose one that best suits you.
8) Do not store all your money in a mobile wallet
While having mobile wallets is extremely convenient, they also carry the risk of being hacked and stolen. Hence, it is always best to not have all your cryptocurrency stored in a mobile wallet.
9) Read all about tax on cryptocurrency
As cryptocurrency is unregulated in many countries, trading in it could draw heavy taxation. Read all the information relating to taxes on crypto investments in your country before you begin investing.
10) Do not blindly jump on the crypto bandwagon
Yes, cryptocurrency is very popular and has several people diving right into investing and trading in it. But that does not mean you should too. Do not blindly jump on to the cryptocurrency bandwagon. Assess and take stock of your own personal finances before making a move.
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