Ever since Bitcoin emerged onto the scene in 2009, it is safe to say that the pioneer cryptocurrency has revolutionized the way people view currency. It is being regarded as the future of money and the market capitalization of the crypto market has skyrocketed. It had slowed down after 2017’s peak and the crypto winter hit, but the onset of the global COVID-19 pandemic last year got things going once more. The industry is expected to expand and grow further, with more and more traders flocking towards this space. Multiple altcoins and ICOs have also occurred and some appear to be serious contenders to become the next Bitcoin.
Over the years, there have been a number of people who have made profits in the crypto space, but not everyone has achieved success. When you are investing your time and effort into the crypto market, you want to come out as a winner. So, how can you become a successful crypto trader? Here are some of the things that can help:
Do lots and lots of research
Before you make any investment, not just cryptocurrency, you have to do some thorough research on the internet. You need to find out about all the recent trends related to the crypto market in general and the particular cryptocurrency you are interested in. Apart from checking out its trends and patterns, a cryptocurrency trader also needs to know the background of the cryptocurrency in question. What is the concept behind it? Why was it introduced? Does it have an innovative business model that helps distinguish it from the rest of the coins out there?
There are a number of websites you will come across that will provide you with multiple facts and figures about a cryptocurrency. Every trader should also do a background check on the team that has launched the crypto you want to trade. There may be frauds in the market and you don’t want to lose your hard-earned money. Lastly, you should also check how engaging the developers of the cryptocurrency are with their investors. This is an indication of whether they are genuine or not. If they are inactive, it could be a hint of something fishy.
Invest at the right time
Many people want to know the best time to invest in cryptocurrency, but every trader should understand that there is no such thing. The crypto market is highly unpredictable and the prices are constantly fluctuating. The best time for you to jump onto the crypto train is when prices are relatively low. In addition, you don’t necessarily have to start with Bitcoin because it is already on the expensive side. There are alternatives that you can explore and these low investment options can result in high yields in the future. You should stay updated about the prices of the different cryptocurrencies circulating in the market. This will help you figure out the best time to start trading.
Don’t invest in just one cryptocurrency
A classic rule that you should follow when investing your money anywhere is to not invest all of it in one go. Diversification is of the utmost importance and this is even more vital in the world of cryptocurrency because the risks are very high due to the market’s volatility. It is very tempting to invest all your money in a single coin, especially when it is experiencing a rise. However, do not let greed control your decision and invest your money in different cryptocurrencies. It is possible that one may give you high returns, while the other results in heavy losses.
One can set off the other and you will not have to deal with a complete loss at the end of the day. Considering the instability and unpredictability of the market, you shouldn’t focus much on just one cryptocurrency. You should do proper research and keep an eye on upcoming currencies to invest in multiple options.
Don’t take up a huge portion of your profit
It is certainly a great feeling to make money from your investment, but you should not exceed your profit transactions more than 18% of your existing profit. You can take out a small percentage of your earnings as profit and allow the rest to grow your investment further.