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How to approach crypto if you’re new to the industry

While Bitcoin might have launched over ten years, the cryptocurrency industry is still fairly nascent with nuances in both technology and financial flavors. As more investors add cryptocurrency to their portfolios and as more projects emerge with expansive use-cases, the industry is getting increasing amounts of attention – and if you’re new to the industry, it might seem overwhelming. The concepts might seem tricky, but the more you know, the more you can take advantage of the exciting space. 

Look at solid strategies and avoid hype and FOMO 

Instead of spending a huge amount of money on one cryptocurrency because everyone else is investing in that project or buying into the “next best project”, focus on building a solid trading strategy

Go in with a safe bet and don’t make any aggressive trades and you’ll see a better, healthier return on your investment without the panic.

Pad your portfolio with increased exposure

Some advocate for a one-coin strategy, where you can concentrate your attention on a single cryptocurrency (more often than not, with a fierce focus on Bitcoin), but it runs the risk of putting all of your eggs in one basket.

Instead, finding a balanced selection of different cryptocurrencies gives you more exposure to different successful projects. That’s not to say over-diversify and buy ALL the coins, but put more of a focus on finding the ones which might perform well (such as the leading altcoins). 

Trading technologies like Bit Index AI allows investors to trade a wide variety of cryptocurrencies and exotic coins. This type of diversifying allows you to strengthen your portfolio. If one project’s token struggles with finding steady strength, it doesn’t mean your entire portfolio will struggle

 To find projects that might work for your portfolio will take some research and some consideration of your risk-appetite. While the market overall is known for its volatility, some tokens tend to be more steady than others. Looking at historic trends and digging into the background of a project will help set your portfolio up for the best chance of success.

What to avoid when entering cryptocurrency

While we’re looking at the best ways to approach cryptocurrency, it’s also worthwhile looking at what to avoid. 

Avoid buying or selling reactively 

The cryptocurrency market is inherently volatile – and the markets are going to move. So if you’ve got a strategy in place, try to stick to it as much as possible and don’t react too significantly if there’s a turn in either direction.

Don’t get caught up in speculation

There are many people who will have an opinion on what the market is doing and will make strong predictions on the price direction. Instead of listening to the speculation, look at the fundamental and technical trends of the market and use objective data instead of subjective statements to make your decisions.

Avoid following celebrity statements and influencer opinions

Besides experts and traders, there are people with influence in other industries that will try to weigh in on the market without any real insight. Even if they are confident in their opinion, if you’re going to listen to someone’s ideas on the cryptocurrency market, rather pay attention to experts in the field.

An important question to ask before you invest in cryptocurrency is Why are you investing in cryptocurrency? There are many ways to invest, and many of them are more stable and have less risk than digital currencies.

Are you just interested because cryptocurrency is popular right now? Or is there a better reason to put your money into one or more specific digital tokens? Different investors have different investment goals, so it makes sense for some people to look into the cryptocurrency market and not for others.

 

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