As a newbie crypto investor, buying cryptocurrency may look easy and fun, like buying some candy bars from the grocery store. However, you fail to realize that getting your money back after a botched crypto purchase can be quite difficult compared to recovering your money after buying an expired candy bar.
That said, how do you ensure that you buy 3 Ethereum, 5 Cardono or the crypto of your choice without making any mistake? Or how do you ensure that you buy the right coin and not a nine-day wonder? It is pretty easy. All you have to do is pay attention to the mistakes we’ll highlight below. Good knowledge of these mistakes will ensure the process of buying crypto doesn’t end up as a nightmare.
1. Not prioritizing security
Buying crypto is not like transferring money from your bank account to the account of another individual. Neither is it like purchasing gadgets from an electronic store. In these instances, if something goes wrong with the transaction, say you transferred the wrong amount to the recipient or got scammed, your bank can intervene. However, this is impossible when it comes to buying crypto due to the absence of a middle man.
Cryptocurrencies like bitcoin cut out the middle man in the typical financial transaction setting thanks to blockchain technology. The details are quite sketchy. However, in a nutshell, blockchain technology allows you to purchase cryptocurrency going through a bank or other financial institutions.
Due to the absence of a middleman, it makes sense to prioritize security when purchasing cryptocurrency because if you lose your cryptocurrency, getting it back may be pretty difficult. Guard your private keys like your life depends on it. In addition, when buying a certain cryptocurrency, consider going for the best stock broker available.
2. Not understanding what you are buying.
So you have some cash ready, and you are eager to invest it into crypto. However, you don’t know the right coin to invest in. Your folks say Bitcoin could reach $300k before the year ends. On social media, there are people predicting that Ethereum could reach $15k.
At that point, you are torn between buying Bitcoin or Ethereum, including some other coin that your close buddy urged you to buy. However, what you don’t realize is that crypto is like the weather; you can’t completely predict it. So it doesn’t make sense to invest in a certain coin simply because people are singing its praises. Rather, do your own research. You could as well create an investment strategy after figuring out the right crypto to buy. Doing this will ensure that you have better value for your money. In addition, it will help you avoid purchasing shitcoins.
3. Not Securing private keys
When you buy crypto, whether it is Ethereum or the almighty bitcoin, you must have a digital wallet. A digital wallet is where you secure your crypto assets. Like your phone, this digital wallet can be secured with private keys. Private keys help protect your crypto from being stolen by marauding hackers. Failure to safeguard your private keys, which are often depicted as a series of alphanumeric characters, could put your crypto at risk.
That said, you must safeguard your private keys, as it grants access to your crypto assets.
4. Buying from the wrong exchange
Cryptocurrencies are usually bought from exchanges. While there exist many exchanges, you should go for the best. Also, have it in mind that there are several fake exchanges out there. So it makes sense to do your research before you proceed to buy your cryptocurrency from an exchange.
Your research should be focused on the reliability of the exchange, its charges, and its user-friendliness. Leverage the power of Google and search for reviews about the exchange. Doing that will help you determine if the exchange is legit or not.
If you aren’t a fan of exchanges, you can visit a bitcoin ATM near me. These ATMs work just like your normal ATM. However, the difference between the two ATMs is that one dispenses cash while the other can be used to purchase bitcoin and other cryptocurrencies.
5. Having FOMO
Fear of missing out is what makes you buy a cryptocurrency because you don’t want to miss out on the potential profit, not because you’ve done your technical analysis and deemed the coin a good buy.
It doesn’t matter if you are buying crypto, stock, or bonds. Letting FOMO dictate your move will almost always lead to a nightmare.
That is like being the last person to hear about a 70% off sale at Amazon. By the time you rush to the store, the shelves will have been wiped clean. In this case, the crypto value will plummet, causing you to get rekt
6. Investing money you cannot afford to lose
Crypto is a good way to earn a good passive income. It has helped many individuals attain wealth. Considering that, when purchasing crypto, don’t make the mistake of investing cash meant for your college tuition or urgent expenses all because you want to get super-rich. Journey down this road isn’t advised.
Even crypto experts don’t invest money meant for crucial expenses. Rather, they invest money they can afford to lose. That said, instead of using your house rent to purchase crypto, why not consider using the little $200 you have to test the waters. The aim is to invest money you can afford to lose because crypto is quite unpredictable.
7. Buying the pump
Here is one major mistake people make. A lot of people buy a certain digital asset when they see it skyrocketing. For instance, when a coin like Vet is on the rise, you see several crypto investors—especially newbies—itching to buy the assets to make a mega profit.
According to experts, buying a coin that is on the massive rise is a big mistake, as there is a huge tendency that it will undergo correction, and when it does, you’ll lose all or most of your money. So, quell the urge to buy a pumping coin. Instead, wait patiently, do your research. If you did the right research, you’d end up buying a coin before it pumps, not when it has gotten to its climax.
Conclusion
When buying crypto, always have it in mind that if you make a silly mistake, the tendency to recover your money is always slim. Having such thoughts affixed to your mind will ensure that you exercise caution when cashing in on a digital asset.
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