There’s no doubt that investing in cryptocurrencies can be a lucrative endeavor, but if you’re not careful, you can also lose a lot of money. This blog post will outline seven common mistakes that crypto investors make and how to avoid them. Let’s get started!
1. Putting all Their Money in One Cryptocurrency
Putting all of your eggs in one crypto basket is probably the most common mistake investors make. Instead, you shouldn’t invest in just one crypto coin, but several. If you have 90% of your crypto portfolio in just one crypto coin, then you’re vulnerable to massive drops if that crypto suddenly plummets. Sticking with crypto coins across the board also ensures you’re in crypto for the long haul and can benefit from crypto profits when they do eventually go up.
2. Not Doing Their Research
Believe it or not, there are plenty of crypto investors who don’t actually take the time to read crypto whitepapers before investing their money into a crypto coin. Learning about the cryptocurrency you’re investing in is one of the most crucial things crypto investors can do before making a crypto purchase. Crypto investors are essentially playing roulette with their investments by not doing research.
3. Investing in Latest Coins to Hit the Market
Just because a crypto coin is new and popular doesn’t necessarily mean it will be profitable. In fact, crypto investors often lose money by investing in newly released cryptocurrencies. Plenty of crypto coins promise to solve crypto problems, but often, they don’t actually do anything. Crypto investors should only invest in coins that solve crypto problems and have potential, not ones that are simply trying to get rich.
4. Only Investing in High Profile Coins
Just like crypto investors shouldn’t buy newly released crypto coins, they shouldn’t join the bandwagon by only investing in popular cryptocurrencies. If crypto is about making profits, investors shouldn’t care if they’re purchasing well-known crypto coins. Instead, they should be looking for crypto coins that have potential, which often means cryptocurrencies with low prices.
5. Lack of Proper Security
The crypto world is filled with thieves ready to take investors’ crypto coins by hacking their wallets. There’s nothing worse than losing crypto funds instantly to an unknown individual. If you fail to protect your crypto wallet properly, you will often fall victim to crypto thieves. Investors should consider crypto wallets that offer top security features, such as 2-factor authentication and crypto vaults, to avoid being hacked.
6. Sending Cryptos to the Wrong Wallet Address
One of the biggest mistakes crypto investors can make is sending crypto coins to incorrect crypto wallets or those that aren’t meant to receive crypto funds. Fortunately, crypto wallets have address alerts that send notifications to crypto owners when they receive coins they didn’t request.
7. Having Unrealistic Expectations
Crypto investors are often guilty of crypto price FOMO (fear of missing out) or crypto greed, which means they make purchases without considering the risks. If crypto investors purchase coins with goals of nothing but profits, gains, mooning, and Lambos, then they’re setting themselves up for failure. While it’s true that crypto prices can skyrocket, they can also plummet, which means crypto owners should never purchase cryptocurrencies with unrealistic expectations.
All in all, the mistake that crypto investors make the most is ignorance. Instead of focusing on crypto problems and potential, they often purchase cryptocurrencies without learning about them first. Investors will easily spot crypto opportunities and scams by doing individual research.