Bitcoin is quickly gaining notoriety because of its astronomical increase in value this year. Cryptocurrencies are becoming common discussion these days. However, it’s an unregulated market and fraudulent behavior can run rampant (see Mtgox). When uneducated investors plunge into the crypto world they should have an idea of the risks at hand. Here are a few tips to protect your cryptocurrency investments:
Only put in what you’re willing to lose. Cryptocurrency is super volatile right now. While most of us have high hopes for the future of Bitcoin and others, don’t start investing your life savings. You may get rich or you may lose a lot.
Use exchanges, like CoinBase, to buy/sell your cryptocurrency. Never house your cryptocurrency on exchanges for long periods of time as they are susceptible to cyber attacks (see Mtgox again). Transfer your coins to hardware wallets to mitigate risks.
Hold. Hold. Hold. Or Hodl as the serious cryptos call it. It can be tempting to play the cryptocurrency market, especially with the level of volatility. Don’t play the buy low/sell high game. There’s a chance you won’t come out for the better. It’s best to hold your coins and ride the highs and lows of the market.
Diversify. Bitcoin is the most known and widely talked about currency, but there are others worth discussion. Diversify you cryptocurrency investments because many of the top 20 coins offer value in their own unique way. There will be room for multiple currencies to thrive in the coming years.
Do your homework. Research the cryptocurrency market for yourself. The more you understand the better off you will be.