Top 10 Tips For New Cryptocurrency Investors

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  • 4. Look for warning signs and recognize that most altcoins have a net present value of zero.

    Look at every new coin you evaluate with a super sceptical eye, because now there is way too much hype for coins that have no use case and are just get rich quick scams by the founders. Some obvious warning signs are:

    • Massive portions of the float are assigned to the founders of the coin.
    • The founders of the coin have anonymous teams or members with a sketchy pasts.
    • Use case does not require or benefit from a blockchain.
    • Vague whitepapers and websites filled with technobabble that sounds impressive to people who don’t know tech.

     

    5. Understand that many people are losing money

    Don’t be a sucker for the get rich quick buzz. There is an illusion right now that making money trading cryptocurrencies is a solid way to make lots of money. Don’t forget that those who lose money keep quiet about it and don’t advertise their failure.

    6. Don’t chase a pump and dump

    Never buy a coin based on a rapid upswing alone. It could be a “Pump and dump” – a trading scam where people organize to coordinate the laddered purchase of an asset, then wait for others to come in at some delay and further increase the price before coordinating the unloading of their position once a specific price target is reached. In general it is better to look for coins that have long term investment value (see points #3 & #4 above).

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