The Everything Guide To Investing In Crypto Currency
Are you going to invest in cryptocurrencies? Read our guide to avoid the most common mistakes of beginners and not lose money.
Ten years after the first Bitcoin exchange, the cryptocurrency landscape still resembles Viajo Oeste. For some, a good decision can bring big profits, while others can lose everything in a single day. So how can you protect the initial capital from changing exchange rates and your profits from scammers?
How to choose a cryptocurrency and minimize risks The first step is to decide which cryptocurrency you want to invest in. There is no rule; almost any token can go up in one day and collapse the next. A beginner cryptocurrency investor needs a lot of luck to anticipate these movements. That said, you can take some steps to protect your investment.
True beginners should choose a currency like Bitcoin or Ethereum, with a demand and tracking record among traders. Such currencies do not usually rise in price as quickly as altcoins (alternative and little-known cryptocurrencies) and, in case you have to get rid of tokens quickly, it will be easier to find a buyer. You can see a list of the most popular currencies and the dynamics of their exchange rates HereFor example. Higher market capitalization generally means lower risk.
If you're a daring investor, confident in your skills and prepared to risk with additional capital, check out the list of emerging altcoins. They are cheaper and promise faster profits, but they also have disadvantages, such as low demand among traders, which, as we said, makes it difficult to convert into real money. However, don't play it all on one card, invest in several cryptocurrencies to improve your chances.
Read the fine print When choosing a cryptocurrency and an exchange platform, don't get carried away by overly generous offers. Even in the field of cryptocurrency investment, no one gives anything away. Therefore, don't be suspicious as long as they promise you extraordinary benefits.
Do you remember the moral story of the Chinese PlusToken service, who promised investors a return of 10-30% per month? More than 3 million people (many from outside China) stung on the hook, prompting PlusToken to reach $17 billion at its best in spring 2019.
Early investors got the promised return, but others weren't so lucky. The "revolutionary platform" was nothing more than a Ponzi scheme. Chinese authorities arrested some of the scammers, but most of the money disappeared without a trace.
Most Ponzi schemes don't go as far as PlusToken, but that doesn't mean their creators are less cunning. For example, the platform XtraderFX, recently closed in the UK, used famous and trusted faces from the world of television and finance to advertise their services fraudulently. In Spain we have also seen known faces fraudulently used to promote cryptocurrency scams.
The common points among cryptocurrency projects of dubious reputation are: • Project team members do not appear in previous cryptocurrency-related news. In some cases, the project team may consist of famous actors, but that's rare. • The creators of cryptocurrencies promise guaranteed profits. This smells like a Ponzi scheme. • The project code repository on GitHub almost never receives updates. This means that there is no such project or that no one has been permanently assigned. If the cryptocurrency calling your interest meets any of these requirements, think twice before investing.
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