3 Drawbacks of Investing in Crypto & How You Can Fix Them
In the trading industry, cryptocurrencies have been a contentious topic. Some people repel it because of its uncertain nature, while some are attracted to it because of that very nature. Some have also named it a “Ponzi Scheme,” as it takes people’s money, turns the profits for a while, and drains all the money down.
The downfall of Bitcoin, the most popular cryptocurrency, from a whopping $64,000 to a mere $20,000 in just a few months, is making people more and more skeptical. There are downfalls in every trading option, and people must make their choices carefully or end up losing their money.
We have gathered a few drawbacks of cryptocurrency, which, when addressed, can be corrected, and you can continue trading in crypto.
1. Are They Reliable for Long-Term Investments?
Crypto is a very young trading industry. Some of the companies have spent less than 5 years in the market. Crypto is famous for its rising prices, and some people treat it as a quick money scheme. But due to its young age, it is usually not considered a long-term investment option.
Crypto prices fluctuate within hours. So, it is a good deal if you are going for short-term trading. But for the long-term, also known as “Hodling,” crypto isn’t a very good option. If you cannot catch up with the market, you can always go for online brokers like https://the-ethereumtrader.com or opt for trading strategies like Range Trading.
2. You Need to Study Crypto like a Compulsory Subject
Crypto has a world of its own. You will need to learn the market trends, the curves, obstacles, what strategies might fail you, which ones will profit you, and what currency you should choose according to your budget.
To imply crypto strategies, you should know about the market else the best strategies will fail for you. You don’t have to buy heavy books or pay thousands for lectures and courses. Go to Google and type “Beginner’s Guide to Crypto,” and you will get everything relevant to crypto explained as simply as ABCs. You can watch Youtube videos, opt for free courses, or consult with a person who has been successful in crypto trading for a while. You just have to make small efforts to receive big outcomes.
3. Rookies are Vulnerable to Risks
Newbies are prone to risks, whether a trading risk or the risk of getting scammed. And this is totally normal for any kind of investment. You’re new, you will fail, you will fall, and you will surely rise after gaining some experience. The main thing is to gain knowledge from your blunders and prevent them at all costs.
Another solution to overcome this is that you should invest small amounts in the beginning. Start small and add more, but gradually when you think you’re a bit stable. Also, never sign up for new online brokers or crypto wallets. Go for those online brokers and crypto wallets that have served the market for a while. New scammers and hackers emerge every day. You must do a background check on them and make your choices wisely.
As cryptocurrency trading is new in the trading market, you should give it some time and learn about it thoroughly. Don’t invest blindly; go for those online brokers and crypto wallet providers that have been in the market for a while.
We have listed these drawbacks for your aid so you can save yourself from the errors that might cause you to lose. Always have a backup plan if the loss supersedes what you have estimated. Go for something called “Stop Loss.” It is an estimated amount that you keep aside that you think may be the loss for your upcoming trade. It will help you in budgeting better and continue your trading journey.