Before searching for ways to make “huge” profits quickly in crypto markets, one needs to research on ways to get best returns of their investments.
But firstly we must know what is cryptocurrency? It is a digital currency that facilitates money transfer worldwide without any governing body. It is secured via cryptography, which makes it impossible for anyone to duplicate or counterfeit any transaction. Most of the cryptocurrencies are based on decentralized networks of Blockchain, which is a distributed ledger or database on a set of nodes of a computer network.
Finding a strong reason for investing in crypto will motivate you to invest sustainably and smartly as early booked-losses are often incurred due to incomplete know-how.
It is important to know that crypto is not for everyone. Crypto prices are volatile. In 2022, TerraUSD crash and crypto exchange FTX collapse wiped out billions of dollars, resulting in customers ending up with an empty pocket. FYI, these were not the only crashes or bankruptcies in crypto this year.
The ongoing Russia-Ukraine war and the political tensions arising in the world have no-doubt adversely affected crypto market. Also, the increase of interest rates by Fed has resulted in tremors in all markets, such as stock market, crypto, commodities, etc. Europe’s energy crisis has had a significant impact over the digital assets sector.
One must have proper knowledge of terms used in day-to-day crypto markets, getting started with a simple glossary would be beneficial. Updating oneself regularly with global and national news through newspaper, television or any source of digital media will definitely help.
It is very crucial to invest in crypto via trusted crypto exchanges. Do not trust market capitalization alone. Various crypto exchanges are being hounded by financial watchdogs for loopholes in finances.
Diversification of your crypto portfolio is the best option, because it will ensure that your losses are minimized. Know that losses are guaranteed, but investing in a variety of crypto investment options will be advantageous in your long-term investment journey. You will learn about the volatility of various instruments and using that knowledge, you can modify your portfolio accordingly.
We don’t give investment advice. But we want to remind you that diversification is the universally accepted mantra followed in the stock market. No one can prevent losses, but everyone can certainly reduce their losses. Crypto is way more volatile than the stock market, so be warned that in crypto, heavy losses are a very high likelihood.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/01/01/hitchhikers-guide-to-crypto-investments/