Cryptocurrency can be a great thing to invest in. Whether you are using it as an actual currency or a trading asset, it can have many different uses and can even make you some extra money. The problem is deciding which currencies are worth your time and money, especially as a beginner. Here are tips on choosing the right cryptocurrency — as well as some to avoid.
Understand the Risks
Cryptocurrency is inherently risky, and that is the point. If you are using crypto to make money or as a way to store large amounts of your own funds, you need to understand that it could increase or decrease in value at any time.
Depending on how you use crypto, this could be a major issue or a minor one, but it is something you have to accept when using it. Like any other currency, cryptocurrency has changing exchange rates that are completely out of your control.
There are countless crypto communities to take advice and ideas from, which can help if you are looking at different coins to see what is unique about them. The strength of a community can sometimes be a good sign of the currency being fairly popular if nothing else.
However, do not take everything at face value, either. There will always be scammers and liars out there, so do not let yourself get swayed too easily. Use your own judgment and think carefully about each option you come across, especially if you are brand new to crypto.
Not sure where to start or what certain terms mean? Always do your research and try to get a basic understanding of what you would be walking into, especially when you are about to commit to a certain currency. You might find out that there are elements you actually do not like about that crypto.
Researching each currency also allows you to get an idea of how it might have performed in the past. If a currency regularly rises and then tanks in value, you might be able to see a kind of pattern. If it had one good spike and then nothing, it is much less predictable but usually also cheaper.
The multiple aspects of cryptocurrency can be confusing, especially for fresh crypto newbies, it is important to educate yourself and stay up to date with the fast-changing state of affairs in crypto and blockchain. One of the easiest ways is to follow market leaders and speakers who have been in the industry for years across the social media platforms as well as following reliable website content such as Lunar Crush, CoinList, and CoinJournal which share regular information from industry professionals is a great source.
Have a Plan
Looking at the top cryptocurrencies can make it very tempting to invest and figure things out later, but that is not always a good idea. Always have some kind of plan, even if it is as basic as “buy at X value, sell when it raises to Y value.”
If you have no plan of any kind, you might end up buying crypto and then simply sitting on it as the value decreases, draining away the money that you spent on it. A lot of people forget about their crypto until the ideal selling conditions have already come and gone.
It might also rise, but if you are not sure when you want to sell it, you might miss your chance and reach the end of the spike with nothing. Even worse, the crypto might eventually enter a free-fall and be worth next to nothing by the time you remember that you have some.