Should you invest in cryptocurrencies? Is it really possible to have multiple accounts?… There are many questions from beginners when they first learn about the cryptocurrency market. So what is an investment’s safe way in cryptocurrencies for newbies? Let’s also learn about this topic with CoinCu.
What is cryptocurrency investment?
First, let’s learn about the concept of cryptocurrency. A cryptocurrency or virtual currency is a digital currency in which transactions are verified and recorded by a decentralized system using cryptography called a blockchain, not by a centralized authority. For example Bitcoin (BTC), Ethereum (ETH),… are cryptocurrencies.
Cryptocurrency investment is like other forms of financial investment. However, the lifetime of cryptocurrencies is still quite new and the market volatility is greater than that of traditional investments such as gold, real estate, etc. Therefore, all investors, especially newbies, must learn information about tokens, reasonable capital allocation, and psychological preparation before investing money.
4 investment tips for beginner
Spend some time learning about the token and the project yourself
Most newcomers when learning about this field, know about Bitcoin(BTC), Ethereum(ETH), and Tether (USDT) first. Then, they will follow social channels like Telegram and Twitter… and invest coins according to someone. In the end, losing money is inevitable.
So where did the mistake come from? This is not an example, this is the majority of financial F0. If it’s your money, but it’s easy to listen to it and then invest it, it’s your fault. Don’t just focus on blaming others.
The second mistake is that you have not learned carefully about the project and the token you invest in. So before investing in certain coins. Please stop, do not rush to buy right away.
Let’s take a look at two types of analysis before investing: fundamental analysis and technical analysis.
- Fundamental analysis: revolves around the token, the project that creates the token, developers… What is the token like? Is this project a cake? What are tokens used for? Who is Backer? Tokenomics how is it?…
- Technical analysis: to know the right time to buy tokens. You don’t have to wait for the FOMO people to jump in to buy, the probability of swinging is very high.
Fundamental analysis and technical analysis are not guaranteed to be 100% correct in all cases. However, understanding these two types of analysis will help investors limit the risks that occur during coin investment.
Channels to learn more about the cryptocurrency market:
CoinMarketCap: This is considered the most reputable information site on the market that provides you with price data, transaction volume, project information, tokens, and historical data of coins.
Twitter: It can be said that this is the fastest information page for you to update crypto news, and projects that have been and are about to be released. In addition, you can follow KOLs, celebrities in the crypto world, and their updates that affect the market. However, you need to filter the information to avoid FUD or Shill news.
Google: This can be considered an encyclopedia of crypto.
YouTube: You can follow market information, and analytical reviews via crypto YouTube channels.
Discord: A pretty popular social network with crypto groups.
There are also other social networks like Facebook, Reddit, Telegram… for you to learn about crypto market information.
Choose a reputable exchange
A cryptocurrency exchange is a place to buy and sell cryptocurrencies. A reputable and safe cryptocurrency exchange will help you confidently invest and limit the risk of floor collapse and fraud. For new players, you should choose to trade the following cryptocurrencies:
Reasonable portfolio allocation
Portfolio allocation is dividing the capital into reasonable parts to pour investment money. Reviewing, and evaluating investment portfolios, will help you maximize profits and limit the risk of loss.
In the field of cryptocurrencies, it is usually divided into the following groups:
- Group 1: Top cap includes coins and tokens in the top 10 by market cap.
- Group 2: Mid cap includes the next 10 tokens.
- Group 3: Low cap includes the remaining tokens.
- Group 4: Shitcoins.
Group of shitcoins, mainly used for the lottery. Calling a shitcoin means it carries a very high risk. Knowledgeable traders, based on some personal analysis, they will buy and sell in a short time to make a profit.
Advice for newbies is not to all-in your account into coin or token operation. You should allocate capital from 60-70% to stable and transparent tokens or projects. It is possible to allocate according to the number of tokens you want to invest in, but it should not be more than 20% of a token. The remaining 30-40% of the portfolio will be stablecoins to avoid market fluctuations, depending on improvisation.
If you determine to hold for a long time, you can allocate capital from time to time and at a reasonable price. Maybe 5-10% per month according to the market situation.
Get used to the market drop
There is a classic saying in the cryptocurrency market that “Buy red, sell green” or “Buy bottom, sell high” which means buy low, sell high. But in reality, few people control their psychology when investing.
All questions and concerns about losses are manifestations of FOMO (Fear Of Missing Out) – the feeling of being missed, missing selling when falling, missing buying when price increases.
It’s a very common feeling among new players. They panic when they see the red chart, even sell off the coin or rush to buy when the price increases by a few dozen percent. With a FOMO mentality, players are easy to lose. Advice for you to stay calm.
If you are a newbie, turn on the chart of BTC, and ETH to preview the price movement in many different time frames from 15 minutes, 1 hour… to 1 month, and 1 year to have a look at the price movement. Since Bitcoin is the leader of the crypto market, a small BTC fluctuation will pull altcoins along, like a domino effect.
In addition, you should slowly invest starting from a small amount to avoid psychological stress after a loss.
Cryptocurrency investment is still a fairly new form for many people, but if you look closely, this is a very potential investment channel and also has a lot of risks when you learn carefully. Follow CoinCu articles to get a better view of the crypto market.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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