7 Tips to Follow to Become a Crypto Investor

In the past few years, the crypto industry has been trending and is only becoming more popular each day.

Almost everyone you talk to nowadays knows about the crypto market and a good number of them are even interested in investing in it.

If you are one of them, don’t go anywhere because, in this article, we’ll show you the steps you need to take to become a crypto investor this year.

1. Learn about the basics

Before you get into the world of investing, it’s important to start learning what the basics of cryptocurrencies are and how they work. Key concepts you need to learn about include:

1. Cryptocurrency: A virtual currency that uses cryptography for security and operates on a decentralized network, typically a blockchain.
2. Blockchain technology: A distributed ledge system that records all transactions transparently and securely.
3. Bitcoin (BTC): The first cryptocurrency to ever exist, which was created by Satoshi Nakamoto in 2009.
4. Altcoins: Different currencies from Bitcoin, that include Ethereum, Solana, Cardano, etc.
5. Decentralized Finance (DeFi): A financial system built on blockchain that allows peer-to-peer (P2P) transactions without intermediaries.

By learning more about these fundamental concepts, you’re better equipped to make more informed investment decisions.

2. Choose which crypto investment strategy you’ll follow

Even though there are many crypto investors across the world, not all of them have the same strategy. There are many different types of crypto investors and we’ll show you which strategies exist and how you can follow them:

1. Buy and Hold (HODLing): Long-term investment strategy where you’ll buy crypto and hold it for years.
2. Trading: Short-term buying and selling based on market trends, requiring more tech analysis skills.
3. Yield farming and staking: Earning passive income by locking up crypto assets in a blockchain network.
4. Investing in meme coins: This includes early-stage investments in new cryptocurrency projects where the risk is high with a high-reward potential.
5. Diversification: Includes investing in many assets to reduce risks.

Choosing your strategy will depend on your financial goals, experience level, and risk appetite.

3. Choose a cryptocurrency exchange

In order to buy and trade cryptocurrencies, you need to have a reliable exchange platform. Popular crypto exchange platforms that many invest in include Binance, Crypto.com, Coinbase, Gemini, and Bybit.

Each exchange platform has the major coins listed, but the number of coins listed there is not the same.

When choosing which exchange platform to invest in, it’s important to consider the level of security the exchange platform offers, how smooth it is when making a purchase, the fees associated with deposits, withdrawals, trading, and the reputation of the exchange platform.

An exchange platform’s reputation matters a lot and it’s important to always read reviews and see what other investors have to say about a certain crypto exchange platform.

4. Conduct market analysis and read whitepapers

The crypto market is dynamic and it’s always important to conduct research that will help you make better and smarter investment decisions. The number one rule is to read whitepapers before you invest in any cryptocurrency coin. You need to learn more about the coin and see how it was created, and what its future predictions are.

A cryptocurrency white paper outlines all the economic and technical aspects of specific cryptocurrencies. It’s written by the cryptocurrency’s development team and core members who serve as a guide for potential investors and miners.

Producing a whitepaper is a requirement for all new crypto coins that are considered professional, and helps investors understand how its business differs from its rivals.

Next, you have the market. There are many different ways you can conduct a market analysis. Let’s take a closer look at each of them:

1. Crypto news: Stay updated with platforms like CoinDesk, Decrypt, etc.
2. Social media & communities: Follow crypto influencers and join forums.
3. On-chain analysis: Platforms like Glassnode can provide you with blockchain data insights.
4. TradingView: Daily charts you can use for technical analysis. This is done through the platform you purchase and sell your cryptocurrencies on.

By always remaining vigilant, you can make the best decisions when it comes to your investments.

5. Learn about the different income opportunities in crypto

Aside from buying and selling, there are different ways you can earn passive income in the crypto world. The most popular methods for doing so include:

1. Staking: Lock up your assets in a blockchain to earn rewards. This can be highly beneficial in the long term.
2. Lending: Lend your crypto on platforms to earn interest. This might not have a huge effect on your profits, but serves well as a passive income.
3. Yield farming: You can provide liquidity to DeFi protocols and earn rewards. This income opportunity can be great for both short and long-term profits.
4. Non-Fungible Tokens (NFTs) purchases: You can buy and sell NFTs for profit. Especially if you purchase NFTs that are rare, it’s even more possible to make higher profits.

Exploring passive income streams can significantly help in improving your overall crypto investment strategy.

6. Learn to manage risks and volatility

Cryptocurrency markets are highly volatile, and managing risk is important for long-term success. Even though you can’t completely eliminate risks, there are still plenty of methods to reduce them. We’ll show you exactly how.

Diversification

Try spreading your investments to multiple assets to reduce risk. You can always invest in different promising altcoins that are in the top 100 listings. Altcoins with higher market caps are always much more safe to invest in compared to those who just entered the market or have low market caps.

Use risk management tools

Set stop-loss and take-profit orders to limit potential losses and secure your profits. This will automatically sell your coins if they fall below a specific price point. This makes sure that you don’t possess high losses when investing. It’s a great way to prevent large losses if you are investing large amounts.

Secure your investments

Store your long-term holdings in hardware wallets to protect them against any online hacks. The best way to do so is to use two-factor authentication (2FA).

Two-factor authentication security makes sure that even if your account does get hacked, attackers won’t be able to access your wallet as it’s protected by an additional security method that only you know about.

Plan for volatility

Crypto prices can sometimes swing wildly when there are upcoming events that will impact the market. They can be both short and long-term fluctuations. This will all depend on whether the market is in a bear or bull phase.

Set realistic expectations and always invest money that you can afford to lose. You can track your portfolio’s performance over time and rebalance it if required. The whole point of successful investments is to make sure you are adapting to market conditions rather than just sticking to one plan.

7. Stay updated and adapt to market trends

The cryptocurrency landscape is continuously evolving and staying informed of what will happen is important. The crypto market is evolving quickly and now, people are getting informed of changes more than ever.

However, one way you can stay ahead of the curve is to subscribe to crypto news channels. As of now, X (formerly Twitter) is a popular platform that instantly informs all investors about any major events that are related to the crypto market.

Let’s face it, the crypto market will get impacted by any kind of news, especially when they are political or related to the world’s economy. It only takes a single decision to impact the market both in the short and long term, so that’s why you should keep your heads up.

Moreover, it’s always a good idea to join online forums such as Discord groups, and communities on social media that discuss crypto-related topics and what to expect from your investments.

For learning purposes, you can attend webinars, conferences, and networking events to learn more about what’s going to happen in the market and get firsthand insights about what you can expect.

It’s now time to take your crypto investments to the next level

Becoming a successful crypto investor requires knowledge, strategy, and patience. By following these seven essential tips- from conducting thorough research and diversifying your portfolio to managing risks and staying updated on market trends– you can navigate the volatile world of cryptocurrency with confidence.

Always remember that crypto investing is a long-term game. Stay disciplined, make informed decisions, and never invest more than you can afford to lose. Following the right mindset and approach, you can take advantage of the opportunities in the crypto market and work toward financial growth. Therefore, it’s now time to leave everything aside and take the necessary steps to become the expert you are known to be.