8 Things to Do Before You Step Foot in the Crypto Market
It’s no secret that cryptocurrencies have taken over the world by storm. As of the year twenty-eighteen, no one is not even remotely familiar with the concept given that the cryptocurrency market is being valued at around a whopping $100 Billion.
The first cryptocurrency, the Bitcoin, ever introduced to the common man was in 2009 and the way that these digital currencies have experienced exponential growth, there are no possibilities of the market slowing down. Rather numerous individuals in the investment & finance sector consider entering the crypto world as they have opened up numerous new opportunities for the different fields in the market, whether it be finance, education, insurance, automotive industry, etc.
The automotive industry has gone through periods of immense success and growth as the implementation and integration of cryptocurrencies into the system have completely transformed it to a whole new level. For instance, the Autoblock is an organization that displays a wide set of products which use the principle mechanism of cryptocurrencies, i.e., the blockchain technology. The company aims to revolutionize the automotive industry by taking advantage of the digital economy and creating an online platform that facilitates the trading of cars. All in all, their efforts have proven to be a great success as they provide a clear cloud space which provides a fair vehicle valuation system, the option to store currencies in digital wallets, anonymity of user data and a visible & traceable source of the transaction. They also developed their own motor trade-oriented cryptocurrency called the AutoCoin. According to an article published by AM magazine, even the chief executive officer at We Buy Cars Today, a car valuation company in the UK, believes that payment through cryptocurrencies is now taking shape. As a result, they have also become one of the pioneers in offering the option of paying through the AutoCoin.
What you should know?
Given how the success of the marketplace is being driven to new heights, there are quite a lot of beginners who wish to invest in cryptocurrencies. While the growth in numbers seems significantly high when you’re viewing the market from a safe distance, entering it requires a calm, complete and intelligent analysis to prevent you from incurring any losses.
Hence we are going to be discussing a few general steps that one ought to know before stepping into the crypto market. Some of these rules are pretty general in nature but ironically are often forgotten by the player in the excitement of playing the game. Just as a gambler would do, a crypto investor needs to stay alert and keep all eyes open for any hurdle coming their way. Following are approximately 8 things you should be able to take care of before making an investment.
1. Grow your Knowledge
You can do this by doing your own research on any currency you might be thinking of investing in. No matter how close your fellow peers are to you, information provided by others should always be considered incomplete. What you find out and understand on your own make for a sound and logical decision regarding any investment decision. According to an article published by Bit Degree, a common acronym used in the real, as well as the crypto world, is FUD or fear, uncertainty, and disinformation.
There will be numerous times when many people will try to talk you out of an investment which may even turn out to be quite profitable. Just think of how the traditional investment world works, and you will get an idea.
2. Not easy money
Always go by the rule that money gained easy, goes down the drain with the same ease. Many beginners enter the crypto market believing it’s a shortcut to earn good money in little or no time at all. This is the most childish claim any investor could make. Though stories that you hear of people such as Matthew Mellon or Brian Armstrong, CEO of Coinbase, who really do ward off as millionaires are very true, they have also worked hard and have great minds and thinking skills behind every investment decision they make. Hence it is important to participate in the market with due diligence and carefully observe all trends before you start losing money.
3. Everything that glitters is not gold
There is a phenomenon commonly used in the crypto world which is Pump & Dump Coins. These coins are such which provide a temporarily attractive picture of their value, but most of the times, in reality, they aren’t really the best choice. Their value declines with the same rate they increase. While you are searching for profitable options, there will always be a few coins that will be seen surging by almost a hundred percent in just 24 hours. As a result, investors should always be aware and updated about different trends.
4. Whales aren’t only creatures of the sea
Speaking of pump & dump coins, many large players in the market influence the values of coins or digital tokens with their purchasing power. These influencers are actually called whales, and one should always be on a lookout for them as their finances can vary valuation leading to quick decisions so better not be greedy!
5. Word of Mouth isn’t always trustworthy
Many times in marketing we hear a renowned concept that promotes or defames any product called word of mouth. Where the marketing world relies heavily on this concept, it isn’t the best option to depend on completely in the crypto world. According to an article published by bit degree, one should steer clear by the act of persuasion. Meaning many participants in the market tend to defame a coin to bring down its value so they could buy it at a lower price.
6. Risk Management
Learn the art of risk management as the rule of conventional intelligent always says not to put all your eggs in one basket. You should understand that even if the value of one currency may rise at a certain point in time, it may not always stay the same. The value will experience a dip sooner or later.
7. Keep your affordability to lose in mind
Sometimes, the market will seem highly attractive, and there won’t be a need, but you will feel the urge to invest more than you initially thought of. This move according to crypto stellar, can get you in big trouble. The future of these coins is determined by greater players, the stronger masses and government policies. If by chance you invest into one coin and its value falls, you will be in for a humongous shock.
8. Maintain a Stop Loss Target
An important step is to set a starting target profit value along with a stop loss target that determines the level of loss where the trade should get closed. This will help you ensure that even if you do incur a loss, it will not go beyond a certain point making sure that you are not plunged into a debt pool instantaneously.
These steps once considered can help not only beginners but also existing participants who may still be learning the art of intelligent investment and financial decision making. Whether it’s a portfolio investment or a crypto investment, beginners should keep in mind these ideas as it will really help them polish their skills.
Also consider reading our great article about Top 9 Beginner Tools to Keep an Eye on Cryptocurrencies.
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