Cryptocurrency investments are on the rise, and there’s no denying that these new-age digital assets hold real value, and it seems that with each passing day the market only gets busier. This is a good thing for a lot of long-term crypto proponents and investors who have long hoped to see this kind of growth. However, it also means that a lot of new people are getting into crypto investment — and that can be as daunting as it is exciting.
If you’re a beginner in crypto investment in 2021, you’ve undoubtedly recognized the potential in the market. But you’re also diving into a new kind of financial venture, and it’s important to approach any such venture with appropriate preparation and knowledge. So, with that in mind, here are five crucial tips for beginners to keep in mind as you begin your crypto investment journey.
Crypto Trading Tips For Beginners
1. Treat Experts Skeptically
As you go about your own research on crypto investment, you’ll come across countless “expert” predictions regarding future prices. You may also notice that these predictions are often in conflict with one another, and seldom wind up being accurate. Furthermore, it is often seen that the more certain an expert tends to be (or the louder), the less accurate predictions they share. Now, this is not to say that crypto investment does not involve prediction. Rather, it’s just to caution that you shouldn’t take concrete crypto buying tips from self-proclaimed experts making ironclad, unsupported predictions. Rather, you should seek out informed and detailed price analyses and use them to support your decisions.
2. Don’t Worry About the Tech
The technology involved in cryptocurrency can be fascinating. However, it also has very little to do with actual investment. For instance, you can spend weeks reading about the origins, underlying tech, and tech potential of Bitcoin, and in the end, it may not influence your bitcoin investment strategy at all. Now, in the long term, there are some benefits to understanding some relevant technology, because it may inform you as to whether or not a specific cryptocurrency has growth potential. Practically speaking though, there is little need to worry yourself over how it all works so long as you have an exchange you’re comfortable with.
3. Consider Cheap Starts
When you’re new to the market and you start considering the top cryptocurrency to invest in, you may quickly become intimidated by some of the pricing. If Bitcoin is over $45,000, for instance, you might wonder how you can invest in it meaningfully without a ton of cash at your disposal. Ultimately though, the solutions to this problem are part of what make crypto investments so appealing. First and foremost, you can invest in fractions of coins, such that you can buy even 0.001 bitcoin and watch it mature in your account. Additionally, some of the most promising cryptocurrencies are still quite cheap and make for great entry points to the market. Our article titled ‘Cheapest Cryptocurrencies to Invest Under $1 in 2021’ pointed to a few options — like VeChain, Stellar, and Polygon to name a few, that you may want to look at as you’re getting started.
4. Consider Sustainability
Sustainability wasn’t a huge concern in investing just 10 years ago. Over time though, it has become a priority. AskMoney featured a piece on socially responsible investing among its trending investment and finance pieces recently, wherein it was said that investors “want to see companies with strong values succeed.” This desire, it seems, translated to many such companies demonstrating more strength during 2020 economic downturns than their counterparts. This is all relevant to crypto investing strategies because it may well be indicative of future trends, particularly as sustainability becomes a bigger concern with cryptos in general. That doesn’t mean your portfolio should only include “green” cryptos. But there are assets like Cardano, Ripple, and Nano that exist in part to serve this interest.
5. Make Crypto Part of a Bigger Portfolio
The cryptocurrency market tends to move in a fairly uniform manner. This makes diversification within the market difficult (though possible), and strengthens the argument most financial experts would make that you should make crypto just part of your larger portfolio. The core idea is that cryptocurrency is ideally traded as part of a portfolio that includes other kinds of assets. This way, you can tap into the potential of the crypto market without relying wholly on it.
This piece is specially written for Mudrex by JBelcher
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