7 tips to not lose money with cryptocurrencies / Tech Headlines

The investment in bitcoin and cryptocurrencies is rage among various savers with some exposure to risk, so it is important to know some tips not to lose money.

In fact, according to market analysts, it is estimated that only 10% of investors make money on these investments, and the rest lose.

A concrete fact is that throughout 2022 the price of bitcoin accumulate a 2.2% loss and the ethereal down 8.8%.

“Crypto Fever” Current It reminds me of the so-called gold rush. More and more people are encouraged to invest in cryptocurrencies with the expectation of obtaining high returns. Unfortunately, statistics show that 9 out of 10 investors lose money“, He says Nicholas Boninalawyer and businessman specialized in digital currencies.

For this reason, this expert considers that when it comes to saving on this type of virtual asset, the most important thing is “study and inform yourself conscientiously”, to make good decisions, because what is at stake is the money every.

It should be remembered that one cryptocurrency is a digital representation of a value, so they do not physically exist.

Investing in bitcoin and other cryptocurrencies has its risks for savers

Also, the buying and selling of cryptocurrencies itself not regulated beyond that governments can control who operates with these assets, the exchange platforms and other participants in the transactions.

In summary, Bonina shares with iProfesional some advice to be able to invest with greater security, and with less margin of error, in bitcoin and other cryptocurrencies.

1-Consider the volatility of the cryptocurrency market

Although investing in CRYPTOCURRENCY has great appeal flexibilityyour model decentralized and its global reach generate that “there are greater risks”.

“In fact, The greater the chance of profit, the greater the risk involved.”Bonina details.

2-Invest in Bitcoin and other cryptocurrencies with a strategy

The large number of people who are investing in bitcoin and other cryptocurrencies lets you know “Invest however you want, without thinking too much about it.”

“It is always advisable to enter with a well-defined strategy in terms of market, volume, investment horizon, loss that can be sustained and percentage of profit that is wanted, among other things”, recommends this analyst.

And narrow: “When the price is going down and you panic, it is more difficult to make objective decisions.And that’s when mistakes can be costly.”

Cryptocurrency investing is viewed as a strategy in terms of the selected asset, time frame, and risk tolerance.

3-Consider the trading volume

To define the strategy, Bonina stresses that it is important to look at the size of the market, trading volume, data of operation and statistics of the cryptocurrency (white paper), the reputation and solvency of the exchange.

“Do not believe what is published in an advertisement. The only way to make good decisions is to be informed and aware of what you are doing,” she advises.

4-Investment horizon in cryptocurrencies

Another key point of the strategy is to decide the time horizon of the investmentIt can be short-term or long-term.

This point serves, among many things, to decide what trends will be more interesting for the investor.

5-Establish what loss will be supported and profit percentage

It is also often recommended to decide in advance thanWhat percentage do you want to win and how much are you willing to lose?

This serves to counteract moments of panic and euphoria. of the market and, especially, our fears and degree of tolerance to risk.

“Once we determine the loss that we are willing to take, a good advice is to establish the stop losswhich are orders made in advance to avoid losses”, adds Bonina.

The price of cryptocurrencies is adjusted in dollars, making it an attractive investment in US currency

Cryptocurrency is priced in dollars, making it an attractive investment in US currency, but comes with a high risk.

6-Maintain balance in the face of a drop in the price of Bitcoin

in a volatile market like the one in the CRYPTOCURRENCYthis analyst suggests “being very alert to our emotional responses.”

In other words, it is clear that everyone invests to make money and does not think about losing, “but the statistics show that only 10% win,” warns Bonina.

So your advice is it is important to inform yourself in advance, choose a strategy and keep a cool head to make objective decisions.

7-Be alert to pyramid scams

Finally, another aspect to take into account in the investments in cryptocurrencies is the question of pyramid scams.

«AN pyramid scheme or fraud it is a form of scam that attracts investors and pays them with money from new investorsand not with the result of a legitimate business. For this scheme to work, new savers must always be entering,” emphasizes Bonina.

Like any type of investment, there are dangers of pyramid schemes in this segment.

Like any type of investment, there are dangers of pyramid scams in the segment of bitcoin and other cryptocurrencies.

Therefore, based on the advice of the United States Securities and Exchange Commission (SEC) on ponzi schemes, This expert mentions the following list with some “warning signs The red flags» to identify pyramid schemes in the world of cryptocurrencies:

-promise high yields with little or no risk.

-It is a necessary condition to hire new Participants.

-promise fixed returns or constant over time.

-There is difficulty withdrawing moneyand constantly encourage “reinvesting” it.

-They use influencers and luxury events seduce to the participants.

“In these cases, if an investment seems too good to be true, it probably isn’t true or legitimate. As the brooks Law, ´nine women cannot have a baby in a month´. The phrase is a good reminder that there are usually no magical results”, concludes Bonina.

In summary, Every investment carries risks. And it takes time to give results.

In addition, another rule to keep in mind in the world of investments is that the higher the expected rate of return for a chosen instrument, logically, the risk of it increases.

“AN cryptocurrencyperhaps, you can double your price in a short time, but you can also lose itBonina reflects.

In fact, he mentions that Warren Buffetone of the most successful investors of all time, often insists on don’t invest in something you don’t understand.

«If someone offers you ´a great investment opportunity in crypto´, make sure you get information and advice from a trusted professional, to understand how what they are offering you works”, Bonina concludes to iProfesional.

Keywords of this note:
#tips #to #lose #money #with #cryptocurrencies
Source: iprofesional.com

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