Top 5 most common mistakes made by crypto beginners
Are you new to the world of crypto, and do you want to get a jump start on investing? If so, there are a few things you should keep in mind. It is crucial to guard yourself against common mistakes that other crypto beginners before you have already made. This article lists the five most common mistakes so you do not make them. This way, you will get a jump start toward becoming a successful crypto investor.
1. Not researching cryptocurrencies before purchase
If you are new to the world of cryptocurrencies, it is wise to wait to purchase coins. Before deciding to invest in a particular currency, it is helpful to research the coin‘s plans properly. For example, you can explore a coin through the crypto project‘s whitepaper, which contains a roadmap with all the project‘s plans. You can also keep an eye on the price from the past week and look carefully at the coin's history. When you have done your research and are convinced you want to invest in a currency, you can start looking for the right moment to invest.
Investing in a cryptocurrency after a rise is a common beginner‘s mistake. This mistake is better known as FOMO. The Fear Of Missing Out is a well-known mistake within the world of cryptocurrencies. The Fear Of Missing Out is a psychological force that drives investors to make impulsive decisions. In cryptocurrency trading, FOMO leads investors to buy a cryptocurrency when prices are in a big surge, hoping not to miss out on further gains. FOMO often leads to impulse purchases and can lead to significant losses.
3. Not diversifying your portfolio
A common beginner‘s mistake is investing all your money in one cryptocurrency. This is risky because it means you can lose all your money at once if something goes wrong with this particular cryptocurrency. To reduce this risk, you should diversify your wallet. This is done by spreading your money across different cryptocurrencies. This way, you can offset any loss with your other investments.
4. Letting yourself be led by crypto “experts.”
Many crypto traders on social media label themselves as “crypto experts” and post advice and tips for trading on social media. Adopting these investments is a common beginner‘s mistake. After all, no human can “time” the market or consistently predict prices in the market. Always do your research before investing.
5. Failing to secure your account properly
Make sure your account is properly protected at all times. Many people new to crypto think that having a good password is enough to protect your account. Make sure you enable 2FA and pair it with the Google Authenticator app on your phone. That way, you should store your cryptocurrencies more securely.