Investing in cryptocurrencies is now the hottest trend in the investment world. The excessive news coverage and global interest has led to a lot of curiosity and interest. Everyone is interested to know what cryptocurrency investment entails.
From my interactions with people in the field and listening to questions raised i have distilled cryptocurrency investment into three important lessons crypto investors must be aware of. Many people are buying cryptocurrencies with the perception and expectation of infinite price increases that will make them overnight millionaires.
The complete belief in the narrative and the fear of missing out has led people to sell properties or risk all their life savings on cryptocurrencies. Here below i will discuss in detail three lessons on cryptocurrency investment focusing on how you can buy these digital assets at low prices and sell them at a huge profit later.
Do not Expect Triple Digit Returns Overnight!
Though known to be highly volatile with unprecedented price swings no cryptocurrency investment will guarantee you a 100% return in a single day or within a very short time frame. Experts have often times predicted major upward price moves in the price of Bitcoin or another alternative coin only to be defied by a move in the opposite direction.
An instance is renowned technology guru John McAfee prediction that Verge would rise to $15 dollars by June 2018. The converse happened. Verge had a precipitous drop to $0.0002. This market is still a nascent market that can be very volatile with many players influencing the direction. Threats of government regulation, government crackdowns, exchange hacks and exchanges filing for bankruptcy are all catalysts for price declines. However, at the right time new ICOs arriveand cryptocurrencies catch upward momentum and engage in a bull market.
Do not Invest With Money You Can Not Afford To Lose
Some cases are tragic. In late 2017 to early 2018, a story ran about a couple who sold off their properties to invest in cryptocurrencies specifically Bitcoin. At the time, one Bitcoin was worth more than $10,000 at market price. Most likely their decision was made by the remarkable bull market in Bitcoin that saw the price move from $2000 to $10,000. That was a foolish and very risky decision. Taking a risk is part of the investment process but it must be weighed against other factors and costs.
Shortly after selling their properties and investing in Bitcoin the price of Bitcoin began to fall, dropping massively. This provides an important lesson, invest only with money you can afford to lose in a digital asset. Bitcoin's price or any other cryptocurrency's price can crash just like the Dotcom Bubble or Dutch Tulip Mania did. Crypto is going to be increasingly regulated however, limiting the chances this may happen according to BS UK
Expect that the price will fall after investing.
A friend who I had guided in buying Digibyte inquired, "So when will i get rich?" This question is not unique to my friend but runs endlessly in the minds of almost all cryptocurrency investors who feel cheated when they see the cryptocurrency they have invested in falling in price.
Anytime you invest in a digital asset be aware that it is normal when it experiences a price fall. Markets experience pullbacks all the time. The cryptocurrency market also experiences corrections. This is prevalent throughout Bitcoin's history due to its higher volatility.
However, keep in mind that a cryptocurrency can double or triple in price after a fall.
Posted from my blog with SteemPress : https://icoshrimp.com/investing-in-cryptocurrencies/