Avoid These 6 Crypto Mistakes
Smart investors are turning to cryptocurrencies to diversify their portfolios and retirement accounts. Crypto investments can be effortless and affordable, and cryptocurrencies can be easily added to an IRA as part of a long-term investment strategy.
However, the ease of crypto investing has also prompted new investors to make some avoidable mistakes. Understanding the best moves to take before that first transaction can make adding cryptocurrency to any portfolio more successful.
Avoid: Investing in One Type of Crypto
The most famous cryptocurrencies are Bitcoin and Ethereum. So, it’s tempting to invest in what seems familiar because it has been discussed the most.
However, a smart investor wouldn’t put all of their money in Apple stock, for example. Diversification is a better option, often producing better returns.
The same holds true for cryptocurrencies. There are more than 18,000 cryptocurrencies available to invest in, and Bitcoin IRA supplies access to more than 60 of the most popular. Diversifying a portfolio with crypto is as easy as diversifying with stocks.
Avoid: Not Doing Diligent Research
Cryptocurrencies produce whitepapers at the launch of their new currency to explain to investors and potential investors how this coin is different and what it supports. Each crypto project is designed to solve a specific problem. The whitepaper explains what problem a particular coin will solve and how it is expected to perform.
Diligent research often involves reading the whitepapers, or at the very least, the one-pagers of each coin before investing. Also, investors can join forums that talk about each project to hear from other investors.
It’s important to note how recently others have been talking about a coin, too. Ensuring that the coin is still relevant avoids the crypto investment mistake of falling for a scam.
Avoid: Forgetting Your Keyphrase
A keyphrase — also known as a passphrase or password — is designed to keep investments on the blockchain secure. The stories of investors with millions of dollars sitting in a crypto wallet they can’t access are legendary.
Because of these stories, additional options are available to investors who want their crypto secure but can’t always remember their long keyphrase.
keyphrase because we do it for you.
Avoid: Investing Without a Plan
It’s fun to want to dive into cryptocurrency investing as soon as a wallet has been opened. But, just as investing in stocks and bonds, starting without a road map could be a costly mistake.
- Understand both short- and long-term goals
- Research preferred projects
- Monitor market changes
- Manage risk
Avoid: Thinking Short-Term
Let’s say an investor put money into Bitcoin when it emerged in 2008. For the first couple of years, the price was barely above $0, and by 2011, had “skyrocketed” as high as $30. If the same investor had sold their shares at the end of 2011 for $5, that would seem like a decent return.
But by 2017, nine years after the initial investment, the price of Bitcoin was at $20,000.
Cryptocurrencies are showing long-term potential for investors considering a long-term investment, and an IRA offers a tax-advantaged place to house that investment.. For investors looking for short-term crypto trading, monitoring the market could be essential for success.
Do: Use a Trustworthy Crypto Exchange
One big mistake that most traders should avoid making is hopping onto the first platform they find that can assist with crypto trades.
Bitcoin IRA is the world’s first and most trusted crypto IRA platform offering 24/7 trading to users. Investors can utilize the online portal or custom mobile app to buy, sell and swap more than 60 cryptocurrencies for their self-directed retirement accounts.
Setting up an account is effortless, and IRA funds can be rolled over or directly deposited for easy access to trading.
Recommended articles: Guide to Cryptocurrencies in a Roth IRA