7 Tips for Beginner Cryptocurrency Investors – Business Insider
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- Cryptocurrency trading has been very lucrative for some people, but it’s a high-risk market.
- Ariel Fox is definitely an investor who said that watching patterns and researching is essential.
- She also said not to panic sell or invest what you can’t lose, and also to be skeptical when researching.
Cryptocurrency has been obtaining a lot of attention lately, especially after the most up-to-date crash and discussions about the future of Bitcoin and crypto as a whole. Ariel Fox is a 29-year-old cryptocurrency investor who told Insider that she has no plans to out of the space at all.
Documents reviewed by Insider show her portfolio is still more than her initial investments in the market. Fox says she’s not worried about the most up-to-date dip, adding that when you “expand the graph” and appear at the space as a whole to check out the patterns of Bitcoin’s rise and fall as time passes, the recent crash seems less cataclysmic and more just a part of Bitcoin’s overall volatility.
This wounderful woman has some advice for people who are thinking about investing in cryptocurrency but are very new to the area:
1 ) Read a great deal before investing
The initial step to investing in cryptocurrency, based on Fox, is much like any other financial decision: Learn about what you’re trying to do before you get it done. “It’s a good idea to read just as much as you can before putting a considerable amount of money anywhere, ” she said.
By reading and researching, you’ll find out more about individual coins and be able to make more informed decisions about which investments are best for you and your risk tolerance level.
“Stablecoins are good for earning smaller returns in your investments with interest that you simply gain, ” Fox said. That said, you have to be careful about stablecoins, too. Fox is heavily invested in the Gemini stablecoin (GUSD), but others like Terra lost their peg to the US dollar and went belly-up along with riskier coins like Bitcoin.
2 . Use a referral code
Fox declared that if you’re going to invest in cryptocurrency for the first time, you should seek out referral codes in order to get bonuses.
You can get a referral code from the friend who may be already invested in that platform, or you can search for them online. There are plenty of codes out there, so take the time to look through them and find out which ones fit your investment interests the very best.
3. Don’t spend money on anything you’re not prepared to lose
“Don’t invest in something you’re not ready to lose, ” Fox said. “I believe that is certainly true for smaller coins especially, and smaller projects that haven’t been on the market as long or have shown that they fluctuate quite a bit more. ”
It is not only important to remember that cryptocurrency can be quite volatile — these investments are not FDIC insured , so you don’t have that bank-level protection for your assets.
Some trading platforms will offer security against fraud, but hacks are common , and if you lose your password, you lose those assets . Make sure you keep your password in a safe place and pick something that’s difficult to guess.
4. Don’t panic sell
With all the volatility that is included with cryptocurrency, it really is tempting for some investors to obtain skittish and sell whenever their portfolio takes a nosedive, but Fox said that it’s best to ride out the volatility.
“Oh my gosh, don’t panic sell, ” Fox said. It’s not a loss unless you sell, is my belief about that. ”
5. Take profit when you can find gains
One method that has served Fox’s portfolio well is a concept known in cryptocurrency circles as “moon bagging, ” which involves taking gains from coins that spike in price and redistributing those gains to other coins, while also keeping the first amount you invested in that coin.
“So let’s say putting like $300 in a smaller coin — a project you happen to be excited about or really trust — as well as the price skyrockets, and now your investment will be worth $600, ” Fox explained. “I’ll sell $300, convert it back to cash, reinvest it, or whatever — but I’ll hold $300 in that same coin. That 300 is called your ‘moon bag’ and also you basically ride it as it goes up, and may take profit again. ”
By doing this, Fox was able to diversify her crypto portfolio among many other coins while also continuing to glean profits from coins that keep spike up in price.
Fox added that this process is helpful, “especially in a bull market . ”
6. Keep in mind that not every crypto influencer has your best interest at heart
Fox said that there are a lot of sketchy crypto influencers out there which it’s important to remain skeptical and question the motives behind the information you’re getting.
“Some of them are getting paid to promote certain projects that aren’t necessarily reliable because that’s their livelihood, ” Fox said. “There are certain voices in the crypto space I trust over others. ”
Fox said she’ll look for the projects and coins mentioned on Twitter, Reddit, or other social media sites, and will pass if she doesn’t visit a lot of buzz or excitement from a many investors. “I want to see kind of more curiosity about a project from the larger group before I decide to spend money on it, ” Fox said.
7. Don’t try to time the market
“I don’t try to time the market at all, ” Fox said. “When I started, I did try to time the market. I did so a little bit more trying out buying dips, selling, holding in cash, and buying again when it dropped. ”
However , Fox declared that she regrets trying to do that and that it’s not as profitable as riding out the volatility of her holdings.
“I noticed that wasn’t necessarily quite as profitable as just staking it slowly and watching, same with stocks, ” Fox said. “I tried to time the market a little bit with stocks when I first got into retail investing. I noticed that isn’t always the most reliable — especially with crypto. ”
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