One of the main concerns of people who are hesitant to invest in digital currency is that it is very risky. The crypto market is highly volatile and this can be overwhelming to some. To add to that, there is always the fear of technological threats like hacking. But as an investor, there are ways for you to minimize these risks and make investing a better experience.
Secure and Protect your Wallets
It is your responsibility to protect your digital currencies and digital wallets from technological threats. One can do so effectively by having both a hot storage and a cold storage. Typically, if you make a lot of cryptocurrency transactions, you’d want to have a hot storage or online wallet for ease of access. If you just keep your investments, you’d want to invest in cold storage—a hardware or paper wallet—and keep them there. We suggest that you get both. Keep the bulk of your investments in a hardware wallet and the rest that you’d like to use in trading in a digital one.
Stick to the Big Guns
This isn’t to say that all the up and coming, new coins are not worth your money. But when you’re a beginner just starting out, investing in the top coins greatly minimizes the risk of you losing your money. Cryptocurrencies like Bitcoin and Ethereum have a low chance of crashing and failing so it’s wise to put most of your money where you can feel more secure.
Don’t Put All Your Eggs in One Basket
This is classic advice for investors everywhere: Diversify your portfolio. You wouldn’t want to put all your money in one coin because in the unfortunate event that it fails, you lose everything. Maybe you could put 70% of your investible money in big digital currencies and 30% scattered among growing coins. Maybe you could even evenly distribute your money and try them all! It really depends on you and what you are confident in based on your research. Which brings us to our next way to minimize risks:
Research, research, research!
You don’t just dive in and invest your hard earned money just anywhere. You would want to do your own research about the different cryptocurrencies out there to know where you should invest.
In a later article, we will discuss the things you should be looking for and monitoring in a cryptocurrency. We are always here to help with your research about all things cryptocurrency so check out our page facebook.com/cryptoclubph regularly and send us a message for any questions or concerns you may have!