According to CNBC, 83 percent of millennial millionaires own cryptocurrency assets. So if you’re looking for financial independence, explosive returns, and the ability to kiss your day job goodbye, cryptocurrency trading can deliver all of this and more.
But there’s a problem that many would-be traders run into:
The crypto market is fast and unforgiving.
What can you do to protect your profits? Keep reading to find out how you can avoid losing money to common crypto mistakes.
1. Be Careful When Purchasing New Coins
In terms of finances, the cryptocurrency market is kind of like the Wild West. There are many types of cryptocurrency to choose from. And depending on who you ask, every new coin is officially the best cryptocurrency to buy.
While there’s nothing wrong with going to an exchange that lets you check out the latest Uniswap price alongside your Ethereum news, you don’t want to go overboard with the speculative coins. Even if you’ve found the cryptocurrency that’s going to be the next Bitcoin, it never hurts to slow down and do your research.
2. Have a Plan to Keep Your Cryptocurrency Secure
When you deposit your paychecks each month, creating your own anti-theft strategy is probably the furthest thing from your mind. After all, if your branch was the victim of an armed robbery, you would likely expect the bank’s insurance and the FBI to do the heavy lifting of getting everyone’s money back.
With cryptocurrency, that’s not the case. As the wallet holder, you have to function as your own bank. And to make matters worse, hackers have been known to gain unauthorized access to the money held by crypto exchanges.
The internet is full of stories told by people who lost money after a data breach or an unscrupulous individual made off with their coins. From your wallet storage methods to your profit-taking strategy, you’ll have to plan your crypto interactions with the security of your coins in mind.
3. Familiarize Yourself With the Blockchain Network
Cryptocurrency is one of those areas where people often know just enough to be dangerous. As such, it’s not unusual to see folks promoting new cryptocurrency coins and tokens while sprinkling in enough buzzwords to sound legit. And because so many folks are looking to earn a living through cryptocurrency, it’s easy to be blinded by the thought of making more money in less time.
When you understand how blockchain technology works, it becomes a lot easier to spot potential scams. If a new crypto exchange goes online or a new platform claims to be handing out top-secret trading signals, you’ll have the knowledge needed to say, “Wait a minute. That’s not how cryptocurrency works!”.
Cryptocurrency Trading Requires Patience and Savvy
Most cryptocurrency trading mistakes boil down to people being in such a hurry to cash in on the market that they forget to do their due diligence. Like trading in any other market, cryptocurrency is about making steady gains and compounding your results over time. If you’re patient and thorough as you approach the crypto market, you’ll be getting solid returns in less time than you think.
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