Ignorance of the nuances of working with the crypto market can lead to a loss of funds. How to protect yourself from losses and start working competently with digital assets? Read my article on the main mistakes when buying bitcoin and how to avoid them.
Why is crypto trading considered so risky?
Investing in cryptocurrency is associated with great risk, primarily because digital assets are highly volatile. However, this is far from the only reason that can lead to losses. Despite its many advantages, digital money has a number of disadvantages. There are other nuances to consider before purchasing digital coins.
1) Insecure storage
Cyberattacks are the second largest problem and a frequent occurrence in the cryptomarket. Hacker attacks are becoming more sophisticated. Bitcoin wallets and large sums that circulate on marketplaces have become especially attractive to thieves.
Leaving tokens on the exchange wallet is not the safest option. The addresses used by exchanges to store assets usually contain large volumes of cryptocurrencies, which attract fraudsters.
This is how cryptocurrency wallets become targets of hackers.
The International Securities and Exchange Commission has confirmed that more than half of the platforms have faced cyber attacks. So, in 2016, due to an error in the code, hackers gained access to the digital wallets of the DAO hedge fund participants and stole more than $ 150 million. $ 70 million
According to experts, the problem of security in the world of cryptocurrencies will exist for a long time.
What’s the best way to store bitcoin?
The safest way to store cryptocurrency is a hardware wallet. When using such a wallet, you should make a backup copy of the seed phrase, a unique password consisting of a combination of numbers.
2) Inability to determine right moment in the market
Before buying a cryptocurrency, first, you should understand what it is for: it is a long-term investment or a tool for speculation. The point of entry into the asset and the strategy of market behavior will depend on this.
The secret of successful trading in the market lies in the correct determination of the moment when it is better to buy an asset and when it is better to sell it. It is important to think in advance how to act in the event of a sharp collapse or rise in the price of a cryptocurrency.
In case of drawdowns in quotes, traders succumb to emotions and can act impulsively, therefore, you should decide in advance on the reaction to emergencies, having designated for yourself the levels of profit or loss fixation.
Digital coins can be a tool for generating high returns, but only in the hands of experienced investors.
When is the best time to buy Bitcoin?
A relatively safe and win-win time to buy bitcoin is the moment when its price is 80-90% below the historical maximum value, the so-called ATH (All Time High).
Anyone who invests in bitcoin or transacts with cryptocurrencies must first consider the risks in order to take the necessary measures. Only an integrated approach will help to effectively protect funds.
Do you have any experience of investing in cryptocurrency? What strategies do you use? Share your opinion in the comments below! If you wanna learn more or know more you can contact my team or you can jump into a one-on-one call with me right now clicking one of the the below buttons.
He uses to dedicate part of his life to inspire others and help them achieve the most out of their lives. Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech. He is Member of Institute of Directors in London, Member of Changer Club in Riga, Member of Fintech Association of Hong Kong, Member of Singapore Fintech Association, Member of Non Executive Director Association in London and Member of Alumni Network of Draper University in San Francisco. He loves travelling, he is a cigars lover, an amateur golfer and a dapper man.
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