Did you know the cryptocurrency market was worth $1.49 billion in 2021?
Investing in cryptocurrency is a great way to hedge your investments and diversify your portfolio. As one of the most dynamic and investable assets right now, a great crypto investing strategy could see your returns grow in 2022.
However, before you invest, you should familiarize yourself with some of the most common cryptocurrency investing mistakes. That way, you’ll be able to limit the risk-reward factor when investing.
Read on to learn the top 3 cryptocurrency investment mistakes and how to avoid them.
1. Pulling Money Out of a Long-Term Investment
Nowadays, online forums, discussion groups, and YouTubers constantly post fantastic crypto success stories. Stories about crypto investors making thousands of times their initial investment overnight can lead to irresponsible investing.
In a blind race to get super-rich fast, some investors divert funds from other investments to maximize their stake in crypto. While this may seem like a good idea during the initial hype, pulling money out of other stable investments to buy a promising coin is risky and could jeopardize your portfolio as a whole.
A smart crypto investing strategy utilizes crypto coins to back other assets. Complement your investment portfolio by keeping your long-term plans intact. You can use a bitcoin ATM to buy and sell crypto with cash. Find a location near you today.
2. Buying Cheap
Every investor wants to own a piece of the next big crypto, like Doge or Shiba Inu. Growing thousands of times in value, these crypto success stories solidify the notion that buying coins dirt cheap will lead to wild crypto investment profits.
People fail to consider the hundreds of other startup cryptocurrencies that were available for cheap but are now no longer in the market. There is no guarantee that a cheap coin will end up becoming highly valuable. In fact, it is more likely its value will ultimately hit $0.00.
Beware the low price trap. Do your homework before investing your life savings in an obscure cryptocurrency. If you can’t do the research, stick to stable cryptos with a track record of market success.
3. Poor Exit Strategy
Most investors have no understanding plan of when to sell their coins, other than making maximum returns.
As a result, they may take random actions on the spur of the moment.
For example, they do not sell when the price rises because they expect it to rise higher.
Conversely, they do not sell their cryptocurrencies when the value plummets dramatically, hoping that they will be able to reduce their loss by waiting for the price to rise. Investors miss out on generating a profit or lowering their loss in either circumstance.
Common Cryptocurrency Investing Mistakes Explained
So, that’s the 101 on the 3 most common cryptocurrency investing mistakes you should avoid.
Crypto is a fast-moving market with the potential for a great return on investment. By avoiding these common errors, you increase your chances of making a good investment.
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