Cryptocurrency has taken the market by storm!
People with the least knowledge pretend to be a 'Crypto Guru' these days. Investing in crypto is not as simple as it seems; you might gain as well as lose massive amounts in seconds.
Do you want to invest in crypto? or have you already invested in crypto and losing money?
Well, this is the right place you've ever come across!
We asked a few crypto experts and compiled these 24 rules to remember before making a long-term investment in cryptocurrencies.
To begin with here's the first and foremost golden rule to follow.
#1 - Do not invest more than you can afford to lose
You MUST not put your emergency savings into cryptocurrencies because the market is volatile, and you may not be able to withdraw your money when you need it the most.
#2 - Do not borrow from family or friends
While everyone likes to pretend that things are different when it comes to family, the fact is that there always will be trouble when you lose your relatives' money. The same theory applies to friends. As a novice investor, you must refrain from investing others' money. It might work out. But if it doesn't, you have a big problem.
#3 - Store your cryptos in a hardware wallet
You can keep your cryptos in a hardware wallet when you want to save them for the long term. Hardware wallet provides more security than cold wallets, which are prone to hacking.
#4 - Keep your private keys and seed phrased safe
You should never share your private keys and seed phrased with anyone in any condition to save yourself from frauds.
#5 - NEVER go all-in
Once you decide on crypto projects to invest in, remember not to put all the eggs in one basket. Rather than investing in giant and popular crypto coins, diversify your fund into smaller amounts to buy various tokens.
#6 - Know the crypto project you are investing in
When investing in a crypto project, do not rely upon someone else's reviews and recommendations. Decide on a project and dig deep to understand the project, its functionality and read the documentation to verify the authenticity of the project.
#7 - Research.. research.. & more research
Before jumping into the ocean of cryptos, make sure to gather all the required information that will help you invest in the right crypto projects. Many big institutions and investors read whitepapers, study business models, consult with technology experts, and seek financial advice before investing big money in any project.
#8 - Understand crypto regulations in your country
The thumb rule before investing in crypto is to know the laws and taxation regarding these digital currencies in your country.
#9 - Look after scamsters
Since there is no regulation, the crypto market is full of scammers. All such fraudulents want is your money, so do not fall for too good to be true schemes and save yourself from crypto exit scams.
#10 - Do not follow pump-and-dump groups
The group admin of the pump-and-dump group might spread wrong words to earn his profit. You should not fall for any kind of rumors spread by such groups.
#11 - Never go with the flow
Many influencers in the market want to get more likes and views, so they say what people want to hear while the market is in the correction or to the moon. You can listen to them, but do your research before investing in any crypto project.
#12 - Buy the biggest dip
Do not invest blindly just because someone has recommended it. Do your own research and only buy when you spot a nice dip. Always think about the risk to reward ratio before investing in any commodity, let alone cryptocurrencies.
#13 - Never buy crypto when the price has just reached a new high
When a crypto coin price reaches an all-time high, everyone starts buying that coin. But it is advisable not to put your money in such currencies and wait till the price stabilizes at that level for a while.
#14 - Use downtrend as an investment opportunity
The crypto market gets affected by multiple factors, such as rumors or negative comments by any influencer. Do not be victimized by such adverse events and sell your portfolio. Crypto markets do that frequently to shake out weak hands. Instead, use this opportunity to buy more.
#15 - Do not panic sell in FUD
FUD (Fear, Uncertainty, Doubt) can happen overnight, but if you've invested for the long run, it's wise to ignore such FUDs and keep holding your portfolio. FUD and FOMO are temporary; steady growth over time is natural.
#16 - Keep your cool
Do not get panicked when you lose money in crypto. If your friend has made money overnight through crypto, do not envy him. And make sure you do not put your money into the same project without analyzing it just because your friends have made money through it.
#17 - HODL your cryptos for the long term
As we mentioned earlier, day trading is not the ideal way to profit from cryptocurrencies. If you want to make money, put your funds in a reliable crypto project for the long run, and you'll be rewarded handsomely.
#18 - Patience is a virtue
When you doubt yourself while investing, lookout for a bigger picture and analyze the long-term trend, have a look at the Bitcoin rainbow chart, and you will realize that ultimately it goes up.
#19 - Decide on a realistic profit target and exit plan
Once you start earning through crypto, the lust never gets satisfied. So make sure you set a profit target and know when to exit from the market.
#20 - Withdraw the initial amount once you're in profit
This is probably one of the best ways to play in cryptos. Once you've earned enough profit, taking your initial investment saves you from big losses.
#21 - Dollar-cost averaging - a time-tested method
Dollar-cost averaging is the best way to lower the average buying cost. If you buy and the price dumps 50%, you can invest more to average your investment price, for instance.
#22 - Look out for different opinions about bullish and bearish sentiments
It would help if you read or listen to expert advice regarding the current scenario of the market before investing your hard-earned money in crypto.
#23 - Do not believe in the market rumors
You will find randomly created accounts on various social media platforms where anyone can post information and predictions about cryptos. Never follow such accounts until you've done your research.
#24 - Thinking of day trading? A terrible idea
If you are a newbie, avoid day trading. Margin trading and leverage trading are high-risk means of making money.
It may sound attractive in terms of profit, but you could lose all your money due to accumulation from whales and countless bots.