Getting Started With Cryptocurrency-Part 6

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Author : Matt at Matt Matrix 19 Dec 2017

Common mistakes to avoid. Sending tokens to the wrong wallet address. This is super important to remember! Once you send your coins to an incorrect address, it is unrecoverable. Always ensure you are double checking the send/receive address. 1. Sending the wrong amount of Bitcoin. With Bitcoin being divisible up to ten millionth of a unit, it’s hard to keep track of how much money you’re actually sending. Use a website like preev.com/ to double check the value of the BTC you are sending/receiving. General tips and advice. “It’s a safer and more profitable strategy to put time in the market, instead of trying to time the market.” Invest what you can afford to lose. Cryptocurrencies are a brand new asset class, as well as a brand new market. It’s an ultra-high risk investment, and you should invest with the mindset that the money you put in could very well be worthless one day. So don’t invest more than what you can afford to lose. 1. FOMOing in to buy a coin on the rise. Quite often, when a coin is surging in price or making a bull run, it’s tempting to want to buy in and catch the wave. I strongly recommend avoiding rushing in to buy a trade, as most likely, by the time you buy in, the price will start to correct and you’ll be stuck holding tokens at a loss. 2. Don’t try to time the market. When it comes to trading cryptocurrencies, not only is the market much more volatile than traditional markets (where 20%-50% swings in a day is commonplace), but it’s also much more unpredictable. You can’t always sell the top and buy the bottom. It’s a safer and more profitable strategy to put time in the market, instead of trying to time the market.

3. HODL. The more you trade cryptocurrencies, the more you’ll notice people say “Just hodl.”. Originally a typo on a Bitcoin forum, it’s now become a meme and a general trading strategy that means to hold long term. It’s sensible advice, and one that I personally follow and found effective. Simply hold onto your investments throughout the highs and the lows, and avoid day trading. As the markets grow over time, so will your investments, don’t get greedy and try to make multiples of your investments too quickly. 4. Buy the dips. Over time, you’ll start to notice patterns in the crypto market, and there are usually periods of bull runs (strong rise in pricing), followed by a correction. These corrections (or dips), are the perfect time to add to your position and inject more money into your portfolio. 5. Diversify your portfolio. There are a few categories of projects that have natural synergy and near-term applications with blockchain technology, and others that are more long-term potentials or moonshots. Beyond reducing risk, it’s also important to diversify your portfolio to ensure you cast a wider net to bet on different categories to ensure you don’t miss out on any opportunities. I personally suggest looking at the following categories: Currencies (BTC, VTC, etc), Platforms (ETH, NEO, QTUM), Supply-chain (WTC, VEN, WaBi, MOD, etc), Privacy focused (XMR, ZCash, XVG, HUSH, etc), Blockchain Agnostic (ARK, LINK). 6. Always do your own research. Since the crypto-market is currently unregulated, there are a lot of scam projects or simply money-grabs out there. It’s the wild wild west, and you should always, do your own due diligence before investing your hard earned money.

There are lots of factors that you should consider when judging if a token/project is a good investment, here’s a few of them. Team - Is the team experienced, do they have a reputable background? Are they real, verified identities? Technology - Are they building real tech that contributes to a need or solves a problem? What’s different about their approach? Are they in active development? Do they have their own blockchain? Is it a clone of another token? Token - While some projects may have a good concept, it doesn’t necessarily mean it will be a good investment. It’s important to understand whether the token you are purchasing will have properties that will make it increase in value over time. You’re investing in hopes that the price will go up, so the token should have incentives for it to do so, with real utility. Timeline - Does the project have a roadmap? Do they have real, clearly defined goals? Do they already have a working product? What kind of goals have they set and when will they be launched? Understanding the timeline is important to know whether it’s the right time to invest. If there’s no foreseeable milestones until a year later, it would be wiser to invest elsewhere in the short term. In conclusion. Blockchain technology and cryptocurrencies, as of today, are still in its infancy, and there’s a bit of a learning curve to fully understand the space. I personally find it quite fascinating, and it’s awe-inspiring to witness this explosion of wealth, innovation, and technology. It’s reminiscent of the early days of the internet, and there’s no better time than now to invest in projects you believe in, for potentially life-changing returns on investment. So buckle up, place your bets, learn about all the various projects, and watch as the industry reaches mainstream adoption in the years to come. Good luck!

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