The first step to reducing your fears and doubts about cryptocurrency trading is to do your research. It would help if you tried to find out about major losses and ask people in the trading community about their bad experiences. During the recent price boom in Bitcoin, ICOs went wild, and you should also read up on these. Even though the ICO boom was successful, many investors lost money.
Understanding the Market’s Ups and Downs
Cryptocurrency is highly volatile, and its prices rise and fall based on news, sentiment, and fundamental developments. For example, Bitcoin has plummeted from $30,500 to $23,500 in just a few months, while Ethereum has plummeted nearly 30 percent. This volatility has fueled the interest of traders looking to make a profit, but it can be nerve-wracking for new investors. You can expect even more volatility, but you should be prepared to deal with it.
Understanding the market’s ups and down is crucial to minimizing risk. While it’s impossible to predict which assets will go up and down, savvy investors understand the math behind the trading process in an OKX trading platform. For example, if an asset drops by 50%, it must rise by 100% to break even. To protect yourself from this, diversify your investments.
Avoiding Influencers
Despite the rise of cryptocurrency influencers, there are some important things to remember when dealing with these individuals. First, not all of them are fake or scams, but it can be hard to tell who’s an expert and who’s just trying to make money from you. The internet is littered with thousands of people who claim to be experts in the field, and it can be hard to know which ones are the real deal.
Secondly, avoid trading with influencers on social media. In the case of cryptocurrency, the MiCA regulation could make it illegal to influence a cryptocurrency trader with a sponsored post. Some influencers even go as far as releasing videos on TikTok or YouTube, which have been known to promote cryptocurrency investments and financial services. However, these platforms are cracking down on paid content that pushes viewers to invest.
Investing in Cryptocurrencies
The value of cryptocurrencies is notoriously volatile, and can easily lose thousands of dollars within a few hours. In addition, there is very little regulation and little consumer protection. As such, you should treat cryptocurrencies like speculative investments and understand their risks before investing.
Fear of missing out, or FOMO, is an old phenomenon that can lead to various negative effects, ranging from loss of money to depression. However, with a little planning, you can avoid FOMO and take control of your crypto investments.
Investing in Stable-Value Assets
Stablecoins are digital currencies that have low volatility. They are often linked to fiat currencies, though some stablecoins are linked to precious metals. Stablecoins offer a more secure environment for investors than other cryptocurrencies, and they closely mimic the price of everyday currencies. But it’s important to note that there is no guarantee that these currencies will remain stable. They may be susceptible to economic problems and security and fraud issues.
The first step in eliminating your fears about crypto trading is to invest in assets that have a stable value. Bitcoin, for example, has a limited supply of 19 million coins and will have 21 million coins in circulation in the future. While there are still people hoping to make millions from this cryptocurrency, you should always exercise extreme caution.
