Although the world of cryptocurrency is super risky due to its known high volatility, there are a lot of small-time and large-scale investors who are choosing it as their mode of investment. Based on the current data, there are thousands of crypto tokens out there in the market. And there are also many tools and platforms or exchanges that aspiring would-be traders and investors can use.
Crypto short-term and long-term traders can execute their trades using these tools, but the question is, how long should you hold your cryptocurrency investment?
In this article, let us walk you through a guide for your path to investing, what are the things you need to do, and the common mistakes you need to avoid.
Every trader and investor should go deep in doing market analyses in cryptocurrency, no matter if you are a beginner or you’ve been in the crypto industry for quite some time. One must always keep updated with the current news or events that might affect your crypto investments. Fortunately, getting updated with current trends in the crypto market is made easy for traders. You can easily find comprehensive and trusted information that every enthusiast should know in BiteMyCoin’s in-depth analysis of the crypto market and the rising trends.
Key Things That Guide You in Holding Cryptocurrency Investments
The Time You Made the Investment
When you want to earn your desired crypto profits, you decide to sell. And, that’s what business is all about, selling when there is a reasonable profit. Most experts said the time you should buy or invest in a crypto is when the value is bearish and hold it until the bull market occurs. Two scenarios usually happen when investing in a crypto token. Some investors gain massive profits after they buy the coin. Other investors also experienced a huge drop in their investments when the crypto token’s price fell after they invested. In that case, the latter investors cannot release their investments yet, so there comes the challenge of holding as what investors always said, “HODL”, which means “Hold On for Dear Life.”
The Reason Why You Decided to Invest
Some finance analysts often said that investment is the same as savings that expand and multiply with profits. A lot of people want to invest in many ways and purposes. Some people decide to invest for the main speculation or are just caught up in the hype and want to earn possible income. Other investors also made their investment due to their trust in the project that they anticipate to produce massive returns in the next years to come.
When an investor executes their trade or investment due to pure hype and speculation, he/she cannot decide well in holding and selling his/her investment in case the crypto prices move in an opposite direction.
Common Mistakes Crypto Investors/Traders Make
Buying Crypto for the Sole Reason of Low Price
Low crypto prices don’t always mean it’s on sale or it indicates a bargain. Crypto prices drop for a reason. As an investor, you must investigate and do in-depth research about the crypto tokens that have low prices. Take note of the crypto coins that have falling user rates. Some developers no longer update the project, which made other crypto tokens stay in low value, which is fundamentally not a good option to invest in.
“All in’’ Investing
Being an aspiring cryptocurrency investor, it’s your responsibility to investigate the platforms and exchanges where you want to execute your trade and investment. Some trading platforms ask you to maximize your capital to produce an enormous profit in return. You don’t want to lose your hard-earned money quickly.
Treating Cryptocurrency as a Quick-Rich Investment
In many aspects, making money in legitimate ways is not that easy, whether you’re investing in stocks, forex, or other financial assets. The same algorithm exists in the crypto industry. You need to spend most of your time learning, making mistakes, and getting lessons from it until you find your way to successfully do it.
Your decision on when to enter your trade and investment depends on your purpose and why you want to join the crypto industry. The crypto market is highly volatile, so you have to enter and exit your trade with caution and care. By doing so, you lessen the risk of losing money in your investment, as well as maximize your chances to earn profits in return.