5 common mistakes when investing in cryptocurrencies

Much has been heard about Bitcoin in recent years, and new digital currencies appear on the market every day. Some have skyrocketed their initial value, and many people, attracted by this appreciation, end up betting all their chips on this market. Therefore, with all this appreciation, these crypto assets have attracted more and more attention.

Is investing in cryptocurrency worth it?

But is it worth putting together all your savings and investing in a digital currency? First of all, you need to understand that this market is profitable, but this will depend on the choice of currency and the cold blood you have, because, at a given moment, you can earn a lot, but at another time, you can suffer from some devaluations, as volatility is one of the characteristics of digital currencies.

Know that, like any risky investment, investing in cryptocurrencies is not a guarantee of return, and there is no manual for easy enrichment. Therefore, the best choice is always to study and verify which currencies have a high chance of growth, analyze the project and adjust your expectations of exponential return in the short term.

See the 5 common mistakes when investing in cryptocurrencies

So, if you are a beginner, we will help you not to make any mistakes when investing in cryptocurrencies. Let's see what they are:

1 – Not knowing your investor profile

First, you need to understand your investor profile. It is divided into: conservative, moderate and aggressive.

The conservative is that type of person who seeks to preserve their capital without tolerating risk. Those who have this profile prefer to invest little and earn little than to invest a lot with the risk of losses. He also prefers investments that can be redeemed at short notice.

The moderate is willing to take some kind of risk as long as it gives a differentiated return in the medium term, but he still has a little fear and thinks a lot about the preservation of his capital. This profile is a middle ground, since part of its capital is in investments with lower returns and without risk, and another part in investments with higher returns, but with risks.

The aggressive person tolerates risks and does not need to be redeemed in the medium term, that is, he thinks about the long term and accepts market fluctuations. It is also more tolerant of capital losses, as long as it can have higher returns in the long run.

2 – Investing all your capital and not paying attention to fees

Many are attracted by the idea that they will make easy money with cryptocurrencies and end up investing their wealth for years. Know that the digital currency market is very volatile, so it is necessary to diversify your portfolio because just as you can make a lot of money, you can also lose a lot of money, there is no "magic formula" and much less earn "easy money."

Putting money into cryptocurrencies requires buying, selling, depositing, withdrawing, brokerage, and transfers. All of this requires fees, and if you're not aware of all the fees charged, you could end up getting a bad deal.

3 – Expect a quick turnaround

Many think that, by investing in cryptocurrencies, they will get rich, as they saw on the internet or on TV that someone sold everything and invested in cryptocurrencies. This can happen? He can! However, it doesn't happen to most people.

Investing in cryptocurrencies requires study, thinking that you will make a lot of money in the short term will only bring frustration, because that's not how it works. Buying crypto assets requires research and analysis of the factors that define whether or not a particular asset is worth buying.

Furthermore, it is necessary for the investor to keep in mind that this investment is going at "little steps" . It is necessary to think about the long term, follow the lows and highs, and study the market.

4 – Not diversifying the portfolio

It is important to have diversified investments. It's no use not studying and betting all your chips on a single investment. Imagine if the currency plummets considerably? Studying various crypto assets and investing part of your capital in each one is important.

5 – Not choosing a trusted exchange and falling for scams

To invest in crypto assets, the ideal is to choose a trusted exchange where you can have all the support whenever you need it. Search the internet, check the exchange's reputation, and avoid exchanges that, for some reason, have blocked investor withdrawals or disappeared with customer coins. Also, don't fall for scams. Many companies on the market promise exorbitant earnings but know that this is just another way to make money from you, so avoid investments like this.