Last Updated on 11 September, 2023 by Samuelsson
This generation of investors is one lucky bunch to have the opportunity to participate in a new type of market. The digital age has given birth to blockchain technology, making access to digital currencies possible.
If you’ve heard about Bitcoin, Ethereum, and Dogecoin, then you’ve touched the tip of the cryptocurrency market. According to Allied Market Research, this new type of market is projected to reach a global value of $4.94 billion by 2030. The continuous growth of cryptocurrency investments has become so ubiquitous it’s becoming more challenging to get ahead of the masses.
So, if you want to have more productive results compared to the rest, here are three tips to get ahead in the crypto market:
- Stay Focused On Your Purpose
The first thing you have to remember if you want to stay ahead of the masses in the crypto market is to stay focused on your purpose. Knowing why you entered this type of investing can help you develop a sound strategy that considers many factors, including your financial limits, lifestyle, and most importantly, help you ride the fear of missing out (FOMO) tide.
As with any investment, emotions can muddle your thoughts and influence how you implement your trades. It’s always best to remember that the crypto market is volatile, and surviving the big swings of cryptocurrencies entails the discipline to stick to your trading plan and ignore the hype around you. This is not to say that you should think and talk in absolute concepts; you must be able to stay true to your goal but have the foresight to anticipate any negative or positive changes in the market and implement a trading plan accordingly. This is why you should put effort into research.
- Research Like A Pro
Doing research will perhaps take a chunk of your time as an investor. The research you do will help you shape your crypto trading plan. This trading plan should also include some simulations of what can happen to the market and the appropriate response you can take to gain from these swings.
Some things you may want to do for your research include:
- Short-listing Your Preferred Crypto Exchanges
The gaining popularity of digital currencies will inevitably attract more investors to the market. With more currencies being added, investors must look for platforms where they can easily transact without worrying about their security, feeling limited with their currency exchange options, or losing their motivation because of high exchange fees and currency pairs.
Finding a highly secured cryptocurrency exchange platform is good but finding a simple, easy-to-use one is even better. This is especially true if you’re just starting in the world of digital currency. There are a lot of exchange platforms that provide an excellent user experience, but if you’re still on the lookout, then see here to check out a particularly popular one in Australia.
- Dipping Your Toes In Tokenomics
Tokenomics is understanding the potential value and qualities of a crypto asset. It is to study why and how it will be used. Part of tokenomics is knowing the following factors:
- Utility: This factor covers how this asset will be used, where you can use it, what services or products you can purchase, which platforms are open to using this token if it participates in government protocols, and the like.
- Allocation and Distribution: This refers to the supply, limits, portion for partners, founders, early investors, and if the crypto assets are centralized.
- Inflation Control: This factor is all about the total supply, circulating supply, and maximum supply of a token. Theoretically speaking, if there’s a limited supply of a particular digital currency, then an increase in value should be expected. An example of this is the value of Bitcoin, which has a limited supply of 21 million only, which continues to grow.
- Doing A Background Check On The People Behind It
As with any type of investment, scrutiny doesn’t end with the asset. An investor should make it a point to know who is responsible for this project. Part of your research should include the team behind the cryptocurrency, partnerships, industry leaders, and advisors. Background checking is a must and can be done through channels like LinkedIn, Medium, and Twitter.
- Checking On The Road Map Every Now And Then
As an investor of a legitimate blockchain project, a concise and clear roadmap should be part of what you should know. Milestones, progress, and a timeline should be transparent enough to be found on their website. Investors like you should be able to keep tabs on the current developments, upgrades, additions, and protocols of your chosen digital currency.
- Joining Active Communities About Digital Currencies
Investing in digital currency means joining a high-velocity market that changes quickly and has robust and very active participants. Knowing where to invest before it explodes into mainstream news means more wins for you.
As mentioned, research plays a significant role in your journey as a crypto investor. Aside from getting the latest information and updates from white papers and websites, you can get ahead of the market by joining communities that discuss digital currencies.
Joining spaces like these can give you the latest buzz about the cryptocurrency world long before it becomes trending on Twitter or the latest news. These communities can be found on Reddit, Telegram, or Discord.
- Manage Your Risk
It’s a story you’ve seen repeatedly—investors who dump all of their money in an investment and lose more than their savings. Part of the life of a crypto investor is knowing how to manage your risk. This means understanding what you’re investing in and allocating a certain percentage of your portfolio for crypto investments.
Cryptocurrency investing is not a get-rich-quick scheme. Experts describe this market as highly speculative and volatile. Hence, it is suggested you keep only five percent or less of your total portfolio in this type of investment vehicle. The crypto market doesn’t move like the traditional markets. It is wise to keep yourself updated and make sure that you are financially stable before going headfirst. If you truly understand and feel comfortable with the amount you can potentially lose, go ahead and take the plunge.
Conclusion
Crypto investing still follows the basic tenets used in traditional markets. Know your goal, do your research, and make sure you’re financially sound before you jump in. The wondrous technology of blockchain is here to stay, and as an investor, you can reap the benefits if you do your due diligence.