5 Things to Know Before Buying Your First Crypto

Cryptocurrencies can be a great asset class to invest in. They have managed to make some investors financially free over the last decade. Bitcoin for instance has risen in value fast from 2009 to reach an all-time high of over $60,000.

Cryptocurrencies aren’t all fun though, because you can potentially lose everything investing in them. Some projects are outright bad or even scams, while some were just not lucky. Whatever the case, they can lead to huge losses you may never recover from. 

Because of this, it is best to know what you’re getting into and prepare accordingly. To do that, there are few things you should know as a crypto investor, to ensure that you invest safely. The following are five key things to know before you buy your first crypto.

Do Your Own Research (DYOR)

There’s a lot of information about cryptocurrencies flying around. When reading about crypto assets, you’ll see writeups about how great a project is, and how the token or coin could explode soon.

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This information could push you to invest in such a project, but you shouldn’t fall for it. Instead, dig deeper and find out information for yourself. Such information should include who is behind the project, who are the investors, what utility does the project have?

When you gather that the project is reliable, then you can invest in it with a reasonable amount of confidence. 

Invest Only What you Can Afford to Lose

One thing crypto investors have been struggling with is the temptation to invest everything they have into crypto. This is a big mistake that many have made and have not been able to recover from.

No matter how attractive a crypto asset is, do not under any circumstance invest everything you have, or even just more than what you can afford to lose. If the amount you wish to invest will break your heart if you lose it, that means you’re putting in too much.

Remember, cryptocurrency investing is a 50-50 thing, and it can go both ways. Therefore while you should invest, try to do it safely by investing only what you wouldn’t mind losing.

Don’t FOMO

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FOMO means Fear of Losing Out, and to FOMO in crypto means to rush into a project just because it seems to be doing well. This is another big mistake investors make. They go online, check the top performing asset and put their money in it.

What they don’t realize is that the asset may be already overbought and set for a downward trend. Buying such an asset is said to be buying the top, and after the top comes the bottom. This is not to say that you shouldn’t invest in any buzzing project.

However, your investment decision should be based on your own research and analysis that suggests the asset still has more upward trend.

Don’t Fall for Scams

The cryptocurrency space is full of scams, and they come dressed very beautifully. New investors are more likely to fall for such scams since they have less experience in the industry. If a project promises you returns that sound too good to be true, it probably is too good to be true.

Watch out for projects that promise unreal returns and other incentives. They may just be scammers trying to take your money.

Control Your Private Keys

One of the most common slogans in the crypto space is “if it isn’t your keys, it isn’t your Bitcoin.” This is a warning to anyone investing in crypto assets to not let a third party control their private keys, because you give the person control over your wallet by doing so.

You should therefore get yourself a non-custodial wallet. A non-custodial wallet is one that allows you to control your own private keys, giving you full control of your assets, hence ensuring their security.

If you observe these things, your crypto investing journey is likely to be smooth and rewarding.

Disclaimer: Avantage Cryptocurrency is not liable for any financial losses arising from the information available on our website. Read our disclaimer to learn more. The views and ropinions shared on our blog represent the perspectives of the individual authors only. Engaging in crypto trading carries inherent risks and might not be appropriate for every investor. Before delving into online trading, visitors should verify the legal status of such activities within their local jurisdiction. All logos, images, and trademarks showcased on this website are the property of their respective owners, used in accordance with the Fair Use act. Some of the posts (not all) on this site such as posts in the Avantage Cable category are promotional paid posts not written by our authors.

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