Are the kind of cryptocurrency tips you are looking more along the lines of how to buy? Here is our how to buy cryptocurrency guide. Alternatively if you want some additional tips here are 9 cryptocurrency tips you should read before you buy.
Cryptos are Volatile
If you are not already aware, cryptocurrencies have a tendency to go up and down by large percentage amounts. It can be a hard situation for anyone who cannot handle it. There were a lot of crypto enthusiasts that lived through an 80% drop in price.
This cryptocurrency tip is that the reality is that money is made on more volatile assets. It is nice when they go up, but not so much when they go down. Not everyone can deal with the price fluctuations especially when an asset going down in price.
At some point you may face that moment your crypto goes down more than the price you bought it for. The worst thing you can do is panic sell. If you picked good cryptocurrencies to invest in, resist the temptation to sell.
Do Your Own Research
Before you buy you should always do your own research. If you have any difficulty you could always ask a financial advisor. Unfortunately there are not very many financial advisors out there that provide crypto advice. Most importantly you want sound financial advice.
As time goes by there will be more advisors that will jump on the crypto bandwagon. Forbes noted that cryptocurrency is at the top of the mind of a growing number of financial advisors.
Whatever you do, make sure you do not listen to influencers. Influencers are not financial advisors and they can get caught up in scams. For example after promoting a crypto Mark Cuban is feeling the heat of the crypto crash as documented by Fortune.
You have to figure out who are trusted people you can follow for advice. If you would like some recommendations we suggest you start by checking out the expert advisors listed here.
Do Not Gamble
Some people make the mistake of putting in more than they can afford to lose. If you do this, you would be speculating that the price will go up. It is the equivalent of gambling.
On the other hand there are some market trends like the Bitcoin halving which you should be aware of. The Bitcoin halving dictates to a degree where the whole crypto market is headed. However there is no guarantee for any crypto in general whether it will go up or down.
Not Your Keys, Not Your Coins
This cryptocurrency tip is quite important to know. If you do not have a private key for your crypto assets then you do not own them. This is the case when you place cryptocurrency on an exchange. You have your login and password and that’s pretty much it.
However if exchange gets into some trouble for one reason or another you could lose your cryptos. Like for example what happened to Mt. Gox.
For this reason you should consider securing your cryptocurrency yourself by using a hardware wallet. Meanwhile some cryptocurrencies are not supported by hardware wallets. In this case you should see what alternatives there are where you can keep your private keys.
Don’t Buy at the Market Top
This goes hand in hand with the Bitcoin halving. Time your investment so that you can make the most gains. It is okay if you are slightly late in your timing to get in, but you want to avoid the market top.
Otherwise as soon as you buy you will see the value of your cryptos go down drastically. Consequently you will need to wait roughly another couple of years. This would be until the price gets back to the point where you bought.
If you time things right you can make much more gains.
You Can Buy a Fraction of a Coin
You do not have to buy 1 whole coin. If you take Bitcoin as an example it has 8 units behind the point. You can read about it in these articles on Bitcoin units and Ethereum Units.
So you do not need to buy one whole Bitcoin, you can buy as little as $10/€10/£10. Likewise it is the case for other cryptocurrencies. The minimum amount you are able to buy would depend on the exchange.
Don’t Obsess about Price
You will probably be excited about your new purchase. However unless you are trading you should not be looking at the price all the time.
If you have picked good cryptos then the best thing to do is buy and forget about it. If you have bought Bitcoin or Ethereum there is a little more guarantee and certainty. This is because they have been around for a while. Although there is still no guarantee.
So you should leave them be. At least for a while until it goes up in price. This applies unless something is really off where the cycle is broken. In that case you should consider selling. This leads us to the next cryptocurrency tip:
Don’t Panic Sell
This cryptocurrency tip is relevant to quite a portion of the crowd. It is mostly for those people that do not do their research. This portion of the crown do not have the knowledge about crypto in general or the cryptos they bought.
If they see the market is down they have a tendency to panic sell. This is based on emotion and not market fundamentals. As a result these types of people tend to lose money and not make money. Hence why we placed do you own research as one of the cryptocurrency tips.
Check if You Need to Pay Tax
Not all countries tax cryptocurrency in the same way. You may be required to pay some sort of capital gains tax on the profit you make when you sell crypto. Other countries treat crypto like fiat and you may not be required to pay tax on a one off exchange.
So in this cryptocurrency tip we encourage you to do your homework. Check what your tax consequences are.