Cryptocurrency can be a rollercoaster ride and as a newbie or experienced investor, there are some basic rules you need to follow in the crypto sphere.
If you want to survive the extremely volatile and heavily manipulated crypto market, you have to invest intentionally and follow some basic rules that guide us.
Outlined below are 10 powerful rules
1. Invest Intentionally
Cryptocurrency investment should be treated as any form of investment as it involves your hard-earned money and
Before you invest, make sure you do your due diligence, do your own research, understand the fundamentals of the projects or coins you are investing in and know what you are putting your money into
I cannot stress this enough but when it comes to investing, an intentional approach will eventually
2. Never Invest more than you are willing to lose
There’s a classic saying among (crypto) investors, “never invest more than you’re willing to lose”.
Cryptocurrency investment can be risky, unregulated and highly volatile, there going by this mantra will already put you in a state of mind to take any losses without losing your mind,
Putting in money you’d need for bills in order to make a quick flip will only keep you on the edge, constantly worrying and always anxious
3. Never go all-in or all-out on a project
Hardly would you buy the bottom of the dip, and or sell at the highest peak of a pump, but so far as you buy low and sell high you should be in good profit overall
That’s why dollar-cost averaging (DCA) in and out is always the best way to go.
If you have $1000 to invest in a project for example, first, it’s good you don’t invest it all at once.
It’s wiser to divide the money into (say 4 or 5) different parts and buy in at regular intervals until you’ve exhausted the whole amount.
This is because the market could keep going down after you’ve bought. And if you had used all your funds in the first purchase, you would not be able to take advantage of the new lower price.
Of course, it could also pump straight up after you’ve bought and you would miss getting a bigger profit.
4. This is Not “Financial Advice”
There are a thousand and one different content on cryptos out there, be sure not to take each piece of content as educational content, and not financial advice
Also, do your own due diligence, digest it and use it to make informed and independent crypto investment decisions you and only you are responsible for your decision
5. Double-check everything & AlwTays verify from multiple sources
Don’t trust, verify is a popular term amongst crypto enthusiasts and this is rightly so
The level of deception, misconception, falsehood and propaganda in the sphere is crazy and one would be doing his/herself a great disservice if you do not do your own research and verify information at multiple venues
When sending or receiving crypto there are coins that are on multiple chains so ensure you are using the right one with the right Memo and destination tag when necessary
6. Avoid active trading
Unless you are a professional trader, you really do not have any business trying to actively trade in the crypto market. The most effective and tried trusted method proven over the times is to buy low, HODL and sell High
Trading is one of the fastest ways by which you can lose your money if you do not know what you are doing, avoid it
7. Avoid the Ethereum mainchain
Unless you have significant capital to start with, avoid the Ethereum blockchain, the gas fees are super exorbitant and high
Rather focus on its layer2 solutions like polygon or alternatives like Solona, Avalanche with super low and negligible fees
8. Have your own personal crypto investing plans and strategies and stick to them
It’s your money and only you should have control over how you want to invest them, but not having a clear cut strategy is like gambling
Therefore, create a crypto investment plan and strategize to know which amount will go into what type of crypto investment and stick to your plan
Whether short term, medium or long term, a strategy isn’t complete with an exit plan
9. Diversify your portfolio & keep a portion in stablecoins
Never put your entire eggs in one basket is a popular mantra in the investment world and that runs true for crypto investment too
It’s wise to invest your money in different coins, on different chains, and in different sectors of the crypto economy to give yourself a large diverse portfolio
However if your starting capital is not much, do not over-diversify as having tiny amounts in different projects can hurt your long term
Also keep 5-20% of your total investment in stable coins such as USDT, USDC etc to cater for the scoop up possible hits in crypto winder
10. Don’t invest based on your emotions
The crypto market is run by two primary emotions – FEAR and GREED
Whiles, it is impossible to eliminate completely these two emotions make sure your investment isn’t based on any of these two,
Your investment decisions should be mostly based on data and facts and less on your “feelings”.
So that’s it HODLers, do you have any other crypto advice you’ll like to share fee free to comment them below