The most common mistakes in the crypto sphere [Rookies’ Guide]
If you’re new to cryptocurrency, you’re likely winging it. There’s a steep learning curve filled with potentially expensive mistakes if you are careless. But don’t worry; this article has your back as you navigate the complex world of cryptocurrencies. Here are the most common mistakes in the crypto sphere for rookies.
#1 All-out investing
The first is the cardinal rule of investing in cryptocurrencies: only invest money you can afford to lose. Don’t risk losing your house, car, or kidney, and don’t put all of your virtual digital eggs in one basket. Diversify your cryptocurrency holdings. Consider the best time to take profits. It’s easy to get giddy when prices increase and decide against taking a loss since you believe your investment will constantly skyrocket. Just a reminder, it won’t. Take gains whenever you’ve accomplished particular milestones or objectives. Say you invest $200 in a cryptocurrency asset when it increases by $20. To reduce risk when trading, you might withdraw the first 200 or leave it in and take the profit.
#2 Believing that crypto investing is not prone to money lost
Yes, this is a mistake. But before you get too worried, know that you can do something about it. And that is researching. There is no excuse not to conduct that research because of the wealth of readily available information that can assist you in identifying the key fundamentals of a cryptocurrency. It ranges from the developer’s whitepapers to metrics data on market cap and supply, social media sentiment, and the leadership team.
You want to believe the urban myth that crypto’s easy money, where you only need to be in it to win it. It’s not that simple, though. But people make the big mistake of getting into cryptos, thinking it is. And that can get you into big trouble because just as knowledge is power, ignorance is weakness. Finding out the finer details of crypto is essential to investment decisions and investing. Getting hyped about a coin because some guy in a bar told you to buy it doesn’t count. Because when a project is too good to be true, guess what. It usually is too good to be true. And you don’t want to put your hard-earned cash in something that’s a pump and dump or a rug pool.
#3 Getting easily emotional about crypto
Getting emotional about losing or winning in crypto investing is a mistake. For instance, some people fall for FOMO or Fear of Missing Out. The potent lure known as FOMO is the sweat-inducing fear of missing out. When investors see a project’s price soar and are enthralled by tales of other people’s success rather than the soundness of investing tactics, they tend to invest at a high level. If something is pumped 100% in one day, it doesn’t necessarily guarantee it will continue to pump 100%. It’s possible that you missed the pump and are ready to dump. However, given the extreme volatility of cryptocurrencies, rumours can terrify investors. Like Luna or UST, their investments can lose all of their value.
If you still think a project has solid foundations and they haven’t been disrupted, don’t let someone else’s negative investment analysis affect your own choices. Don’t let FUD convince you to sell at a loss because the asset price might fluctuate continually. It only requires patience and knowing when to enter or exit a position. You often find it’s the same traders who come to FOMO buy at all-time highs, fall victim to FUD, and panic sell. The moral of the story is to avoid letting short-term feelings interfere with long-term objectives and sound judgement.
#4 Choosing the wrong platform
Choosing the wrong platform to get started in crypto is one of the most common mistakes of beginners. They do not take into account the investment method appropriate to their skills. For instance, using broker platforms in crypto trading is said to be better than crypto exchanges for beginners. And that is because brokers can assist you in trading, unlike crypto exchanges where you do such independently. And just a pro tip. To connect with reliable and reputable brokers, wise traders go to trader-broker connecting platforms such as Immediate-edge.io. With such a platform, you can avoid bogus brokers rampant on the internet. Again, choose a platform that is appropriate to your level.
#5 Not taking security seriously
Question. Would you leave the keys to your front door in a place where anyone could easily find them or maybe your passwords on a post note at work? No, right? However, when it comes to cryptocurrencies, many individuals are not very concerned about security which is a significant error. In all crypto domains, hackers and con artists target digital wallets. There was allegedly a cryptocurrency theft valued at over $14 billion in 2021. However, there is no customer service number you can call to get your money back in cryptocurrency. Thus, it is essential to take security seriously.
Experienced traders always use two-factor authentication to protect their wallets and exchanges. A seed phrase is a string of letters and numbers that allows someone to access all the money and data in a wallet, including cash and private keys, NFTs, and other assets. Additionally, avoid storing information on a computer, phone, email, or cloud. On a piece of paper, type it out, and store it someplace secure. A cold wallet, which is safer than a hot wallet kept online or on an exchange, may also be something you want to consider to keep your crypto.
In email or messaging, a small misspelling might not be a huge problem. But that might be very expensive when investing in cryptocurrencies. In estimation, 20% of the total supply of bitcoins is lost forever. One of the most frequent beginning mistakes is using a long string of numbers and letters to send money to the incorrect wallet addresses. Once it’s gone, it’s gone forever. Even seasoned cryptocurrency users can make mistakes, like the founding member of the Juno blockchain who mistyped his address and lost native tokens valued at 36 million.
Before you click, think. Sending a little bit of money upfront is a wise idea. Before sending that much money, double-check that at work. Never try to enter the address by hand. Instead, copy the address to the recipient field. After that, double-check it before clicking “send.”
Recognise that everyone makes errors, so try not to stress. Like in reality, many mistakes are avoidable in the crypto world if you know what they are. You’d be surprised at how many people have begun trading and investing in cryptocurrencies in the hopes of becoming billionaires, but they have no understanding of what they’re doing. Since investing in cryptocurrencies is not a mindless game of chance where decisions can be made on a whim, not having a clear plan is an excellent method to raise the danger of losing all of your money. Since it’s a strategic investment, you must have a plan of action and specific objectives.