The significance of cryptocurrencies has grown far and wide over the past few years. The market is constantly evolving, with investors discovering new use cases regularly. Currently, there are thousands of crypto coins in the market, with Bitcoin as the largest and most remarkable of them all. In spite of this, the current state of the crypto market has kept many investors on edge.
The crypto market’s growing popularity has led to an increase in investments; however, investing in crypto might not be that easy.
There are various facts about crypto that newbies need to understand and analyse before diving into the market, starting with its intense volatility that led to the decline in the value of famous digital currencies like Bitcoin.
Even though the crypto market’s volatility worries investors, investing in cryptocurrency will not slow down anytime soon. So before you take a trip down the crypto investment lane, keep reading to discover eight steps you must take before investing in crypto in 2023.
Steps To Take Before Making That Investment In Cryptocurrency
1. Understand Cryptocurrency:
Well, before you throw money into it, you got to know what it’s truly about, right? At its most basic level, cryptocurrency is a digital currency secured by encryption technology. It’s decentralised, which basically means it’s not controlled by any government or financial institution. Traditional banks cannot relate.
2. Research, Research, Research:
Once you understand what crypto is, it’s time to put your research glasses on and get to it. Don’t just invest in any old crypto that catches your eye. Just because the popular coin “Bitcoin” has been flying around does not mean you should throw your funds at it. Sorry not sorry, Bitcoin. Do your research and make sure you know what you’re getting into. Think of it like a CRB check but for crypto. Don’t just dive into the crypto pool without checking who’s watching over it! Make sure to research the team in charge, the community, and any juicy news that could make it rain (or make you cry, oops) before you take the plunge.
3. Identify Your Investment Goals:
Are you in it for the long haul, or just looking for a quick buck? What is your risk tolerance? I’m talking about crypto, I swear.
Before you commit to a crypto investment, It’s essential to determine your investment goals. This will help you make smart choices about which crypto coins to choose and how much to put in.
4. Choosing the Right Exchange
There are hundreds of crypto exchange apps and even hundreds of vendors out there, and you need to choose the right one for you. Search for exchanges with solid security features, such as two-factor authentication, and check their fees to ensure they are reasonable. You can’t be caught out here lacking when there are top-notch crypto trading apps like Breet, where you can sell Bitcoin for Naira seamlessly for no extra charges. Chelsea, c’mon now.
5. Have a Market Entry Plan:
No, you are not ready to purchase that crypto coin yet. There are still a few things you need. You need an entry plan. This basically means deciding when and how you want to buy crypto coins. Do you want to buy them all at once or over time? Would you prefer to purchase them by credit card or by bank transfer? Figure out your entry plan before you start investing.
6. Have an Exit Plan:
When the market starts to dip, you need your own dip plan. That’s right; you need a plan to know when to pack your investments (yes, I desperately wanted to say load) and sell for profit. An exit plan means deciding when and how you want to sell your crypto coins. Do you want to hold onto them for a long time or sell them quickly? Do you want to sell them for real money or trade them for a different kind of crypto coin? Knowing your exit plan will help you make informed decisions about when to sell and for how much.
7. Decide on an Investment Strategy That Works For You:
I’m about to sound like a real adult right now, but please try not to cringe; In this life, everybody walks a different path, and not everybody has the same goal. I made myself cringe with that one.
Simply put, you need an investment strategy that works for YOU. Before tossing your hard-earned cash into the crypto piggy bank, you must ask yourself some tough questions. How much are you willing to invest, and how much risk are you ready to take? Are you a fearless daredevil or a cautious kitty? Figure out your crypto investment strategy so you can be a smart cookie about which crypto coins to buy and how much to invest.
8. Being Prepared for Volatility:
Finally, preparing for volatility is crucial when investing in cryptocurrencies. Nobody likes unnecessary headaches, so it is better to be prepared. Understand the risks involved and be prepared for market fluctuations. It can be easy to panic during a market downturn, but staying calm and sticking to your investment strategy is important.
In conclusion, investing in cryptocurrencies can be a lucrative and exciting opportunity, but taking the necessary precautions to protect yourself and your investments is crucial. Following the eight steps outlined in this article can increase your chances of success and minimise your risks. Remember to always do your research and seek professional advice if needed.