Over the last few years, more and more people have started using cryptocurrency. There is always something interesting to be said about this form of money. Despite all the hype, the crypto market is not a passing trend. It is used by 300 million people worldwide, and more and more large companies are starting to accept it as a method of payment. However, the cryptoworld is a young market that attracts promoters, fraudsters and people who just want to dream. So, even with all this growth and excitement, you should not buy cryptocurrency out of thin air. Because they are based on speculation, blockchain-based investments are volatile and difficult to plan.
Before you move on to the cryptocurrency stepping stone, you need to do research, as with any other investment, to avoid scammers and protect yourself from the risks and surprises that come with it. Before investing in cryptocurrency, here are five questions you should ask yourself.
Did I read the highlights and official documents?
– Sponsor –
While this may seem obvious, it is important to know exactly what you are investing in. Some even say that cryptocurrency is not an investment but a risk. Others give the coin value based on what they think it can do and what they have seen it do and they are actually doing business in the crypto world. These people most of the time want to protect themselves from fiat currencies or their country’s banking system. If you want to buy cryptocurrency, you should read the white paper for this coin. All real cryptocurrencies will have this document. This document gives a detailed description of the ideas, goals and technologies of the project to help you decide whether to invest or not. Make sure you read the article carefully. The big red flag is that there is no information or details about the project. You should also research what a cryptocurrency bet is and how it can benefit you?
Follow this simple rule: if you don’t know something, don’t invest.
Do they sell coins or tokens to protect people?
Cryptocurrency is more than just buying Bitcoin or Ethereum. As of January 2022, there were more than 8,000 different cryptocurrencies, and now more are being produced. Different investments can be used for a variety of things in the crypto world. For example, coins and tokens are very different. The first value can be measured only in money, and the second – in stocks, services and special mode.
You need to know what you are buying before you buy. You need to know what you want to gain from the investment and how you will get it.
Is the token tied to anything other than promotion?
Your first mistake may be focusing too much on big names. If you have no other goal, you should always put trust first and then investment potential. In other words, you should always choose your coin or token based on their value rather than on clever marketing tricks or a reputable coin position that can last a short time.
How can I get out, and can I afford to lose everything?
The idea that you can invest in cryptocurrency and wake up a multimillionaire is appealing. But it is also a very fake story. Investing in a crypt is not the same as investing in stocks or bonds. Rather, it is more like a guessing game. For every night’s victory there are many losses per night. It’s hard to know what will happen to such investments because they are often based on feelings and perceptions that something is small. So, as with any other type of gambling, you should bet only what you can afford to lose.
If you know how to enter the market, it is equally important to know how to exit it. The main solution is to sell on the market and convert money into fiat currency or a stable coin that tracks fiat currency. You can then put the money in your bank account. Many people try to make money by buying bitcoins or other cryptocurrencies when their prices are falling, and selling them when their prices are rising.