Crypto Investing: 5 Tips For Success


Cryptocurrency, known as crypto for short, has taken the world of investing by storm. The concept was first proposed in 2008 and later was implemented in 2009 with the invention of Bitcoin. Since then, crypto has grown increasingly popular. As of March 2022, the global crypto market is worth just over USD$3 trillion.

If you’re reading this, you’re probably already familiar with the concept of cryptocurrency. Investing in crypto can have big rewards, but this comes with risks. There are many variables and factors that are nearly impossible to predict. With that said, there are some things you can do to maximize your chances of making successful investments.

Below is a list of five tips that can help your crypto investing for the better.

1# Learn about NFTs

If you’ve been looking at crypto investments, there’s almost no doubt that you’ve encountered non-fungible tokens or NFTs. These have been rapidly growing in popularity, with people everywhere starting to invest in this market. The NFT market had generated over USD$23 billion in trading volume as of December 2021.

In simple terms, NFTs are unique digital assets that have a value measured in a specific cryptocurrency. These most commonly take the form of images, usually from a collection. However, nearly anything that can be stored digitally can become an NFT. People buy and sell NFTs depending on their asset price, similarly to stocks.

As you can see, NFTs are growing. You may not want to miss out on the opportunity to invest in the NFT market. For this reason, it may benefit you to learn about NFTs. If you’re taking this route, joining communities like NFT Club is a great way to learn what you need to know.

2# Follow social media

As a crypto investor, you can expect to be spending a significant amount of time looking at social media pages surrounding all of the crypto projects you’re interested in. The success or failure of any crypto project is often dependent on how many people are interested in it and what type of community it attracts.

Suppose you’re interested in a crypto project, whether a coin or something related, like an NFT. Getting involved in the online community is essential. This may include official pages across various platforms, forums, or information pages. This is also an excellent way to see how well the project owners and developers interact with the community.

By engaging with various communities, you’ll eventually build up experience. Over time, this experience will help you when it comes to deciding which crypto projects are worth your investment.

3# Read the white paper

Every cryptocurrency that’s worth investing in should have a good white paper. This is a document explaining everything you need to know about the project. You can usually find this document on the project's website.

The white paper should tell you the project's goal, tell you about its developers, and how the developers plan to achieve this goal. It should also help you understand what value the project brings and why they’ve executed it in the way they have. Knowing how to read a white paper is a valuable skill for crypto investing.

Much like with social media, you’ll accumulate experience after reading multiple whitepapers and observing each respective project. As such, your knowledge will help you analyze the potential of a crypto project before you decide to invest.

4# Use a strategy for your investments

Crypto is a relatively new market. Using an investment strategy may result in better investments. It can also help you lessen your risk when making investments. There are many investment strategies for crypto. It’s recommended to do some research and use a strategy that suits your needs, goals, and resources.

No single strategy is suitable for everyone. Furthermore, your strategy isn’t static. You may do research and decide on something that you’re sure will work for you. But after some time and practice, it may eventually be changed or amended into something else that you find works best.

Of course, try your best to avoid bad strategies and investments. If you do your due diligence on a project and strategy, this will help. Like many of the other things listed, you’ll become better at this over time.

5# Diversify your investments

In other words, manage your risk. It’d probably not be a good idea to invest everything into one cryptocurrency for most people. Should that project fail, you’ll lose everything. Experts recommend that investors who are interested in crypto should have about 5% of their overall portfolio in crypto.

5 Crypto Investing Tips

Placing your investments across different crypto coins and projects can protect you from losing everything in your portfolio. If one investment doesn’t do well, there’s still the possibility of others succeeding.

If you do your research well, you’ll likely find several coins that would be a good investment for you. Take this opportunity to invest across multiple coins.

Conclusion

Crypto can be a beneficial investment, but it can also be volatile and quick to fluctuate. Still, the potential for high rewards attracts many people to the world of crypto investing. Succeeding with these investments requires some level of study and understanding. Follow the tips listed here, do your research, plan effectively, manage your risk, and you’ll set yourself up for successful crypto investing.

Reference List

  • “Cryptocurrency Now Worth More than $3 Trillion | Time”, Source: https://time.com/6115300/cryptocurrency-value-3-trillion/
  • “NFT Market Generated Over $23 Billion In Trading Volume In 2021 (forbes.com)”, Source: https://www.forbes.com/sites/ninabambysheva/2021/12/23/nfts-generated-over-23-billion-in-trading-volume-in-2021/?sh=77999a8f5f0a 
  • “How Much Should You Invest in Crypto — According to 5 Experts | NextAdvisor with TIME”, Source: https://time.com/nextadvisor/investing/cryptocurrency/how-much-your-portfolio-should-be-crypto/