Man holding a bitcoin in hand

As a new cryptocurrency investor making your first moves in the blockchain domain, you’ve probably contemplated the following: did bitcoin reach an all-time high? Is it too late to begin? And what are the practical techniques for profitability in this newly emerging investing space? While you’ve been asking yourself these questions and many others, you’ve likely observed the extended bear market that cryptos have been experiencing.

Notwithstanding the significant drops, cryptocurrencies are far from dying, and the path to investing in cryptocurrencies is better than ever. Here are some cryptocurrency investing strategies, including the five best practices to consider.

1. Disregard all the “Noise”

Numerous skeptics in the media and financial industries may assert that bitcoin is merely a gimmick, a speculative bubble, or even a pyramid operation. In contrast, a larger population welcomes the financial potential and practical applications of cryptocurrency assets. Each side has a big voice and enjoys creating a great deal of noise. Such a degree of noise is only estimated to grow, as you may see a rise in the volume of crypto trading by individual investors. To be a savvy trader in this market, it is ideal to purchase and hold only what you believe in while avoiding the surrounding noise.

2. Conduct Extensive Research On Cryptocurrency

There is always information to consider, and crypto investing is no exception in the present digital age, so there is no justification for investing without a solid grasp of the underlying asset. Online whitepapers are readily available for nearly every cryptocurrency. The same way that you should carry maps in your car, a smart traveler should be well-prepared.
From the most popular to the most obscure cryptocurrencies, materials like the All Crypto Whitepapers can assist anyone in enhancing their understanding of prospective future investments. If it is impossible to determine how the coin runs and, more significantly, produces money, it might be prudent to look elsewhere for investment opportunities.

3. Don’t Put All Of Your Eggs in One Basket

Diversification is essential for bitcoin investments, according to conventional investment thinking. Diversification is vital for a portfolio of cryptocurrency holdings to be well-balanced, just as financial advisors recommend diversifying stock holdings and other investments. You’ve completed your research; therefore, grasp the chance to invest in several coins. You may, for instance, invest in various areas that fulfill distinct use scenarios. In the same way that it is usually safer to travel in a group than alone in an unknown area, having a diversified portfolio will help you take advantage of potential future bitcoin benefits.

4. Choose a Different Personal Email Address

Using a conventional email account exposes an investor to an unwarranted risk of being subjected to a security breach. To mitigate this danger, it is advised to establish a separate trading account, preferably with two-factor authentication and password protection. Regardless, use two-factor authentication for any service that supports it (for instance, both your email and Exchange accounts must demand a two-factor authorization for access). Besides that, avoid using text messages for two-factor authentication; instead, use a separate program like Google Authenticator or Authy. Text messages can be hacked through social engineering.

Also, make sure that when you set up your profiles, you use a unique password and username that doesn’t include any personal information hackers could use to find you.

5. Fully Grasp The Applications for Cold And Hot Wallets

Both offline and online “cold” and “hot” wallets can be used to store crypto. For novice investors, the convenience of hot wallets makes them a more attractive option. As easy as hot wallets are, they are vulnerable to hacking, but cold wallets cannot be compromised (if prepared properly). Preferably, you should store virtual currency or cryptocurrency that you intend to save for a long time in a cold wallet and only a small amount that you may use daily in a hot wallet.

Understand that a widespread error made by inexperienced investors is confusing exchanges with wallets. While it might appear handy to maintain things online at an exchange, a prevalent motto is “if you don’t own your keys, you don’t own your bitcoin.” And you do not own the keys if you store your digital assets on an exchange. When your transactions are hacked, it can lead to massive losses that can even affect you psychologically. Therefore, evaluate the various wallet service providers. Nowadays, there is a vast range of options. 

Final Thoughts

Always consider mobile wallets with caution. It is simply too risky to trade or store substantial amounts of any cryptocurrency on a mobile device. Physically or electronically, mobile phones are more susceptible to infiltration. When conducting trades or keeping assets on mobile devices, the practicality should not outweigh the numerous security problems that arise. Ultimately, these five tips will give you a solid start to a crypto-investing paradise. 

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