There are simple basics that anyone interested in this field must know; it is a huge market full of opportunities, but at the same time, it is full of risks, and the possibility of losing money is very real.
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1️⃣ Cryptocurrencies are not like stocks
Cryptocurrencies differ from stocks because there is no company behind the cryptocurrency that distributes profits to owners, nor do they have an annual budget. The value of cryptocurrency depends on supply and demand, community, and technology, not on operating profits like companies and the stock market.
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2️⃣ High volatility
The cryptocurrency market is very volatile. Prices can rise by 30% in a day or even within hours, and drop by the same percentage the next day or even the same day. For this reason, you should only invest the amount that you do not need in the near term. Do not put your important money that you cannot afford to lose.
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3️⃣ Diversification at the expense of quick profit
That means do not put all your money in one coin even if it is performing well. The best strategy in the cryptocurrency field for those seeking profit is to diversify among strong projects built on Ethereum, Solana, and Binance networks. You can also take a small risk in other smaller coins.
This statement, of course, does not include Bitcoin in this field. You can keep all your money in Bitcoin only as a (digital investment). In addition to investing in gold as a (tangible) investment away from the digital world.
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4️⃣ Know where to store your coins
One of the most important things you should focus on is defining your goal. Are you a trader or a long-term investor? If you are a trader, you can use exchanges and keep your coins on them, as you will need to buy and sell constantly, and the platform makes this easier.
But if you are a long-term investor and do not intend to sell your coins soon, then you need to store your coins in digital wallets and not on exchanges. You have two ways to keep your coins:
- Cold Wallet. It is considered the best option for large amounts.
- Hot Wallets. They are suitable for medium amounts but have less security.
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5️⃣ Understand the laws
The laws differ from one country to another, and some countries consider cryptocurrencies a legal asset and allow you to trade and deal with them. However, some countries consider it prohibited and an illegal activity. You must ensure the tax and legal regulations in your country before you start in this field, as every trade may have tax implications.
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6️⃣ Do not rush after the trend
Most losses occur when people enter after (the project or coin becomes popular) and the price (literally skyrockets). The best time to enter is (before the hype), meaning when the project is in its early stages and not after it becomes famous and reaches a high price.
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7️⃣ Learning and knowledge
You have to learn about this field before you buy any cryptocurrency. Because those who enter without knowledge often come out with a big loss. The educational content I have is large in the form of videos on the channel, and it’s all free. I recommend you follow me there too.
