Cryptocurrency trade and betting with blockchain tech is an industry so new that buyers have to test many solutions on themselves. Sometimes such a lesson costs them a lot. Below are the nine most common mistakes made by beginners.
Using shady market exchanges
There are hundreds of exchange offices in the network today, but not all of them are equally trustworthy. Some problems are cumbersome but harmless – the customer service centre does not respond to messages or, worse still, it is difficult to find any contact details to complain in case of problems. On other platforms, breakdowns can have serious consequences. Login problems do not allow you to withdraw funds and security vulnerabilities can result in data leakage or money theft. Sometimes money deposited in the wallet of an anonymous exchange office simply disappears. Before exchanging funds, it is worth checking the service we are going to trust.
Surrendering to panic
The cryptocurrency market is still very unstable, with prices fluctuating by several dozen percent within a few hours. Sometimes a sudden fall means serious problems, but the history of Bitcoin shows that the exchange rate after a few hours or days of fall can radically change for the better. Anyone who has been following this market for some time now knows that more than once the end of the cryptocurrency and the dramatic falls have been foretold. Financial decisions made under the influence of panic often turn out to be premature after some time.
Taking part in the scam
The creators of any beginner cryptocurrency cannot guarantee profit. A cryptocurrency scam can have a similar structure to a financial pyramid, in which the first buyers are supposed to recommend the purchase of currency to other people and gain wealth through their cash contributions. It is worthwhile to avoid new currencies, about which there are not yet some data in trusted sources, but you can read a lot of enthusiastic, anonymous reviews promising big profits.
Relying on unreliable sources
Currently, there are several hundred cryptocurrencies, and about each of them you can find a flattering word on the web. Before investing in currency on the basis of forum data or an anonymous posting, it is worth checking whether the positive information comes from more than one person (environment) and whether it is confirmed by reliable industry portals. It is always worth checking the exchange rate of a given currency in order to form an opinion about its value. People who are just beginning their adventure with cryptocurrencies should ignore portals providing extreme information. These are sources where most of the content is promises of millions of dollars in profits or warnings of gigantic losses. At the beginning it is difficult to verify such data and actions taken on their basis may prove unreasonable after some time.
Gambling does not require paper money or even casinos. Although in the industry the cryptocurrency can really gain on on the exchange rate in a few minutes or seconds, at the beginning it is worth spending time to get to know the market and its fluctuations. Compulsive speculation rarely reaches the beginner traders.
Setting unrealistic goal
There is still information about investors who once bought 100 bitcoins for a few groszy and today are paying out millions of profit. Such stories ignite the imagination, but they are a fraction of the whole market. In the world of volatile exchange rates for a beginner investor, a profit of 5 or 15% is a lot. You should set a limit and stick to it.
Investing in too many cryptocurrencies at the same time
Experienced buyers often have several or even several dozen or even several dozen currencies in their portfolios. Initially, however, it is better to stick to a few certain currency options and get to know them well before moving on to the next coin. Otherwise, “keeping up” with the situation in many different markets can overwhelm a novice investor who will only act on impulse.
Trusting everything they read
Watching news is, of course, just an example – it can be tracking online information services or visiting industry portals. Contrary to what some people say, Bitcoin’s course is not a coincidence and has a great deal to do with what is happening in the world. Examples can be multiplied. In January, the currency lost 20% of its value for a few hours, because the Chinese central bank started an investigation against those who traded in China with Bitcoin. In November, investors from India bought the most currency in history within a few hours, because the government withdrew some banknotes from circulation overnight. Keeping track of current information from the world allows you to better anticipate exchange rate jumps and investor behaviour.
Investing more than they can lose
Investing savings of life in a capricious cryptocurrency market can make the investor make unreasonable financial decisions and pay out money too quickly, not wanting to lose everything. It can also happen that he will need money and will have no choice but to take it out when the odds are low. Before investing heavily in bitcoins or other currencies, it’s a good idea to familiarize yourself with the basic rules that govern every type of investment and with terms such as regular savings, reserves and financial cushions.