Bitcoins have been quite on the hype these days now. However, if you are planning to become a vital part of it, then the only thing you need to do is to consider every inch bit of the entire ecosystem at first. In simple words, the world of cryptocurrencies is not as easy as it seems; in fact, it is quite vast and complicated. Thus, if you do not want to write up your name among the ones who have faced severe losses in the investment game, then here are a few points that would enlighten your thought process on the dos and don’ts now.
Dos:
- Choose a reliable exchange: There are many exchanges and online platforms available from where you can trade bitcoin. But most of these exchanges are not regulated and they do not maintain 100% transparency. If you choose a small or overseas exchange then you must check their security measures because you can lose your entire fund due to their operational error and cyber hacking. It has been recorded that many exchanges have been hacked and investors have lost their funds previously. So, choosing an exchange that is reliable and secure is important. You can open a free trading account from a secure portal like the BitProfit app to trade bitcoin.
- Choose a secured wallet: Once you open an account on an exchange, you need to choose a secured wallet to keep your bitcoin. You can find different types of wallets in the market such as hardware-based wallets, software wallets, and paper wallets. Hardware or cold wallets are safe as compared to hot wallets, and you can use such wallets to keep your coins safe. You can connect a device (wallet) to your system to access your coins. You must use antivirus and anti-malware software in your system to keep your wallet safe from hackers.
- Invest a small amount: You must invest your funds in bitcoin which you can afford to lose because it is a volatile market and you can lose your entire fund overnight. The price of BTC can fluctuate within a fraction of a second and you can lose a major part of your investment. So, it is better to invest up to 5% of your total portfolio in these digital assets, and you must add other cryptos to your portfolio to diversify your profile.
Don’ts:
- Don’t be afraid of volatility: The bitcoin market is highly volatile, and inter-day price swings are normal. You can find a hike of 10% in the morning and crash down over 20% in the evening.
- Don’t store your coins in your exchange account: Exchanges are prone to cyber-attacks and you can find many reliable exchanges that have faced such problems in the past. So, you can lose your investment if your exchange has been hacked. It is better to hold your coins in a digital wallet and not leave your coins in your exchange account. There is no insurance or legal coverage available for crypto exchanges, and you cannot claim a refund if you lose your funds due to cyber-attacks.
- Don’t be trapped with fake media: Many media houses have reported that bitcoin has died over 300 times, and you can find fake news on social media about bitcoin. The price of BTC can indeed fluctuate massively due to such news because new investors try to sell their coins due to fear of losing their funds. Most of these media houses are operated by large investors and they are circulating such fake news to make BTC available in the market. So, do not sell your coins due to such fake news and reports.
- Beware of scams: Crypto is a new investment option as compared to stocks and bonds, and scammers can steal your funds if you click on their links. You can receive some emails containing information with links, and your wallet will be hacked if you share your keys or click on these links. These are known as Ponzi Schemes where prize and a huge amount is offered to the users.
Apart from that, you can find some cryptos that claimed to be the “next bitcoin” and you can lose your funds by investing in such new coins or assets, as most of these digital coins and tokens are fake. So, you must do proper research to know this market well, and you can also take help from experts or brokers in this regard.
