Crypto has become one of the most prominent investments, especially among young people but it is not all profits/gains as is usually believed. Due to its highly volatile nature, crypto carries as much risk of losing money as it does the promise of making life-changing gains. To make sure the latter is the case, here are 4 simple ways to improve your chances of making money with crypto.
Don’t FOMO
One of the most important lessons to learn as a crypto investor is to avoid FOMO (Fear Of Missing Out). This feeling usually comes when an asset has grown so much that it’s all anyone can talk about, and investors start feeling like they will keep missing the boat if they don’t buy in. By giving into this fear, many investors will rush to buy the token, usually buying at a price referred to as ‘The Top.’
Once this happens, the investors who had bought earlier begin to take profits and dump their holdings on the market. Those who buy the top are stuck holding coins in deep losses as the price of the asset corrects back downward. The best thing to do in such a case is to wait and watch for a retracement instead of jumping straight in while the price is pumping.
Do Your Own Research (DYOR)
The DYOR acronym gets thrown around a lot but that does not eliminate the validity of this argument. Before buying any cryptocurrency, always research it to figure out important things about the project such as if the team members are doxxed, what the roadmap looks like (if it’s achievable or not), and what value the project is bringing.
Do not just blindly follow influencers on social media talking about the next crypto to 100x. More often than not, those influencers are paid to tweet about the coins and do not care whether you win or lose. So it is imperative for you to research any coin before buying it.
Trying To Catch All The Crypto Trends
While following the trends can be a very good way to make money in crypto, it can also lead to massive losses for you. A lot of people are trying to catch every single trend, which is the wrong way to invest in crypto. Rather, look for sectors that have traditionally done well and stick to those. Besides, not all trends are here to stay and if you catch the top, you might end up with bags that may never recover.
Over time, some sectors have proven their ability to last long such as decentralized finance (DeFi), gaming, and real estate. These are sectors that are always in demand and could provide better returns over the long term rather than trying to trade every single trend.
Hold On For Dear Life (HODL)
Social media is filled with screenshots of insane returns from traders who claim to make millions from crypto trading (as they simultaneously push paid courses and channels). However, a tested and true method for investing in crypto is by holding.
This involves buying coins when they are low and then waiting for the bull market to roll around. For example, even if you had purchased Bitcoin (BTC) at the top of the bull market back in 2018 at $19,000, holding through the bear market and to 2021 would’ve resulted in profit for you. The same goes for Ethereum (ETH) and a lot of other digital assets. So finding a good coin and holding can be the best thing for crypto investors. It also requires the least effort.
Bonus Tips For Crypto Investing
When investing in crypto, one thing you want to avoid is always checking the charts. Doing so all the time can either induce fear or FOMO, causing you to buy or sell when you shouldn’t. Instead, set a target for where you want to sell your holdings and wait it out. Go about your daily life and don’t look at charts. (Touch grass).
Also, never invest more than you can afford to lose. In fact, in crypto, you should only invest an amount that would not affect your daily day-to-day living. This includes not using money meant for bills and groceries to invest. By investing money that you can comfortably afford to lose, you take a lot of pressure off yourself and this allows you to navigate your crypto investment journey without fuss.
