Since December 2017 we’ve seen a massive influx of new investors in the crypto space, and the inflow of their money has led to a massive boom for altcoins. I have come up with 10 simple advice points that will help new investors in the crypto space and will make you much more of an intelligent investor:
1. Only invest what you can afford to lose
Don’t have more than 1-5% of your entire investment portfolio in crypto, and only invest what you can afford to lose. Once you double your profit, pull out the principal so you are only playing with profits.
2. Learn to recognize FOMO when it hits you
FOMO is “Fear of missing out” and is one of the main driving forces of the market right now. It leads to emotional investing, so if you ever feel this itch to get in on a rapid upswing because you don’t want to miss out on some new development that is causing it, stop yourself, go to point #3 below and try to be analytical in your investment decision.
3. Do the research when investing in an ICO
I cannot stress this enough, you are buying an asset with your hard earned money, and it should have some utility. Start by reading the whitepaper that is on the main site for the coin. You can avoid a lot of scams by simply critically evaluating the question: “Why does this coin exist?” Is it simply trying to apply a blockchain to something that doesn’t need it or is there a transactional inefficiency/problem that the unique properties of the blockchain can solve?
- What is the Dev Team like? What is their track record? How are they funded, organized?
- Who is their competition and how big is the market they’re targeting? What is the roadmap they created?
- How will they attract their target market, how is their marketing?
- How does the coin derive its value? Is there some sort of dividend structure, profit sharing plan, or is it a store of value within a digital economy? How many coins will be released?