The Do's And Don'ts of Crypto Investment

Without any doubt, the world is already experiencing massive waves of crypto adoption, and we see people joining the crypto space on a daily basis. Furthermore, everyday presents to us new crypto opportunities which we can invest in with the hopes of making profits from them. Here, we will look at how to effectively maximise crypto investment and what to do or not to do when investing in the crypto space.

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1. Research before investing

There are lots of people that do not bother to conduct any form of analysis before investment. Some others also invest with minimal or vague knowledge of the crypto space and this is one of the reasons why they lose funds. Just to let you know, investment, particularly in the crypto space, carries a lot of risks which you should be aware of before investing. The knowledge of these risks helps you to channel your investment aright.

More so, you have to also research on the coin or project that you want to invest in. The times you spend on research will definitely be worth it because it helps your decision making process. Among what to research on is the "when". Yes, knowing when to buy a coin and when to sell a coin is very important. It does not stop as finding a good coin but knowing when to trade instead of justing aping in blindly, or buying at the top and selling at the bottom.

Research covers a whole lot of things: Like the use-case of the coin or project. There are some scamy projects without any real life use-case and without any application. You need to be cautious with such projects because they have the propensity of pulling the rug. Additionally, look out for the teams. If by any chance, something does not seem right about the team members or they are anonymous, then you should be cautious. This is because if the project goes south, there won't be anyone to hold accountable.

2. Don't allow greed and emotions to becloud your sense of investment

A few weeks back, I heard about a particular new crypto investor that invested less than $200 in a particular cryptocurrency and it went up so much that his money turned into over $8000. However, greed could not let him take profits and he was hoping that it will further moon because of the hype surrounding the coin. Well, things did not work according to his plan and the coin fell so massively that he is now in loss. While investing, you should also know when to take profit without allowing greed to be your bane.

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For an investment that has given you a reasonable percentage of profit, it is wise to take profit to avoid cases of negative eventualities. Even if you take profit and the coin dips, you can still buy back later. One thing I figured out is, it is good to take profits in batches (my opinion though), so that even if it increases further, you will have what to sell.

3. Investment diversification

You should learn how to diversify you funds into many projects when investing, instead of investing into just one project. Imagine if you have put in all of your funds into one coins and it performs poorly, you will be in massive loss. But if you have other coins that are doing well, they will cushion the effect of the other coin that is not performing up to par. I remember a particular popular proverb:

Do not store your entire eggs in one basket.

There are many projects in the crypto space that you can invest in. For example, you can distribute the funds through various blockchains: like the BSC, ERC, Sol, Algo, etc. When you have investments in many projects, you will minimise risks and consequently maximise profit.

Thanks for reading