Right now, there are well over 20,000 cryptocurrencies in circulation.
That’s a wildly large number that can be incredibly intimidating to newbie crypto investors. It can seem overwhelming to decide which currency is affordable and worth putting your hard-earned money into.
And it’s in this state of confusion that most mistakes for cryptocurrency investors are made.
If you’re struggling to understand the world of crypto or, worse, already losing money in this space, read on. We highlight some of the most common errors to help you side-step them right out of the gate.
1. Not Understanding the Fees Involved
One crucial money drain many new investors forget to factor into their crypto investment strategy is the gas fees. The exchanges you buy cryptocurrency on charge various fees, with some fees reaching as high as 3% or more.
And that’s not counting the charges from your credit card company or other participating financial institutions.
2. Overtrading
When you’re looking into options for cryptocurrencies, don’t go overboard. Making multiple trades daily isn’t a good idea because you’re more likely to lose than win. Fees, bad trades, and trading to recover eat into your potential profits.
Learning how to buy USDC, for example, should only come after you’ve decided that’s the correct currency for your strategy.
3. Not Thinking Long Term
Over the decades, there have been all kinds of get-rich-quick schemes. And the situation almost always turns out poorly for those that sink money into them. Crypto does have the potential for incredible gains, but a short-term strategy is likely to result in you making bad investment choices.
If you want the best return on investment in your crypto portfolio, think long-term.
4. Making Unsuitable Exchange Choices
Don’t just choose the first crypto exchange platform in your Google search. This is a surefire way to end up with all your money eaten away by fees. Yes, popular or extensive exchanges are typically safe and busy, but they also tend to have the highest costs.
So, do your research before choosing an exchange. Look for a balance between low fees, available currencies, and security.
5. Getting Caught up in the Hype
FOMO, or fear of missing out, is a legitimate reason many people get started in crypto. They read about crypto investment profits and want a piece of the action.
Rushing into any financial investment is likely to result in lost money or, at the very least, dramatically increased risk.
Instead, take your time to learn about cryptocurrency investment and determine your strategy before putting a cent into the market.
Learning from Mistakes for Cryptocurrency Investors
From forgetting to consider the exchange fees to falling for the hype surrounding a fake currency, mistakes for cryptocurrency investors are many and varied.
As with almost any other financial investment option, you need to understand the ins and outs of trading platforms and assets to make (and not lose) money. It’s also helpful to think of crypto as a long-term wealth builder rather than trying to make quick gains.
Read the other bite-sized blogs on our website for more financial tips and tricks.