Blog Invest The Top 5 Cryptocurrency Tips You Need to Know

The Top 5 Cryptocurrency Tips You Need to Know

date August 18, 2022 time 5 min read 260 views

If you’re new to cryptocurrencies, it can be difficult to know where to start. There’s a lot of elements at play, and narrowing down the key basics can be tricky. This is why we’ve put together a list of the top five cryptocurrency tips you need to know if you want to get started.

Top Cryptocurrency Tips

1. Do your own research (DYOR)

Cryptocurrencies are an unregulated form of digital money. They can be used to purchase goods or services on a number of online trading platforms, including exchanges and peer-to-peer marketplaces. There are currently over 1,000 different cryptocurrencies in existence, with each typically representing a different project or purpose.

One of the top cryptocurrency tips is to do your own research before investing.
One of the top cryptocurrency tips is to do your own research before investing. (Source: Unsplash)

Some of these projects are more reliable and reputable than others. Aside from the big names like Bitcoin and Ethereum, there are projects that enjoy a strong reputation within the crypto world. Cardano, Polkadot, and Near are three examples of lesser-known but promising projects you may want to consider investing in.

It’s essential to DYOR about the different types of cryptocurrencies before you start investing. It’s also important to have a basic understanding of how they work and how they can be utilized.

2. Understand the risks

Investing in cryptocurrencies comes with significant risks, so it’s important you take the time to learn about the different risks involved before making any decisions. Although there’s no 100% secure way to invest, you can quantify risks to understand them better and make the right decisions. Here are just a few of the potential issues you might encounter when investing in cryptocurrencies:

  • Volatility: A currency’s value can fluctuate wildly from day to day, making it extremely difficult to predict how your investment will perform over time. This can be particularly problematic for new investors who may be unfamiliar with the markets and have little or no experience in managing their investments.
  • Regulatory uncertainty: One of the major issues currently facing cryptocurrencies is the lack of regulation and transparency. With no government bodies overseeing their operations, cryptocurrencies can be vulnerable to fraud and other scams, while the potential for illegal activity is high due to the lack of legal safeguards.
  • Security breaches: Cryptocurrencies are stored and managed using cryptographic algorithms which require a certain amount of computational power to generate and store. This makes them particularly vulnerable to hacking attacks, which can lead to the theft of funds or other losses for investors. 

3. Only invest what you can afford

One of the biggest mistakes inexperienced investors make is to invest money they can’t afford to lose. If you have a limited budget or plan to invest money that you need for other expenses, it’s important to set realistic goals and determine how much you can realistically afford to invest.

It's important not to go all-in on one cryptocurrency - particularly meme coins.
It’s important not to go all-in on one cryptocurrency – particularly meme coins. (Source: Unsplash)

There are a number of ways you can control your level of investment in crypto:

  • Diversify your investment: Spreading your investment across a number of different coins and tokens reduces the risk associated with any single investment and allows you to benefit from the growth potential of the market as a whole.
  • Invest in small amounts: One of the best ways to insulate yourself from market fluctuations is to keep the amount of capital you’re investing small and spread it over a number of different investments to reduce the risk of losing all of your money if the value of a single investment falls.
  • Set yourself a monthly budget: Setting a clear monthly budget and sticking to it can help you to avoid the temptation to invest more than you had planned and stop you from taking out loans to invest in crypto if you don’t have the funds available.

4. Play the long-term game

Crypto markets are volatile and highly speculative by nature which means that it can be difficult to predict how the value of your investment will change in the short term. Playing the long game and focusing on the long-term potential of your investments does pay off. Such an approach helps to insulate you from volatile spikes and dips.

Like the stock market and real estate, investments have a tendency to pay off in the long-term. While the crypto market is volatile, and carries more risk, it also has the potential to beat the traditional markets. For example, if you look at the price of bitcoin from ten years ago to today, you’ll see that it has skyrocketed in value, while traditional assets such as stocks and bonds have recorded a steadier increase over the same period of time.

The key is to resist the temptation to sell your investment when things go wrong and ride out the short-term volatility of the markets.

5. Invest in multiple projects

Creating a diversified portfolio is an important part of any successful investment strategy and the same principle applies to investing in cryptocurrencies. Not every crypto project will succeed, even the ones that appear strong today. Few would have predicted the collapse of Luna for example.

There are other great cryptocurrencies beyond bitcoin.
There are other great cryptocurrencies beyond bitcoin. (Source: Unsplash)

So, mix up your crypto portfolio and invest in a variety of different projects. A typical portfolio could include:

  • 30% Bitcoin
  • 20% Ethereum
  • 10% each in five smaller, low-cap cryptocurrencies like MCT, NEAR, or FET.

Having a diversified portfolio like this will reduce the risk of losing your investments, and maximize your potential gains.

Investing in MCT coin to earn more

So there you have it, our top five cryptocurrency tips for you to follow. If you’re looking to build your crypto portfolio, why not take a look at our new native MCT token

With MCT, you can convert between multiple cryptocurrencies and access a variety of other financial products, such as investing and staking. This way, you can try out different projects and ways to make money.

Perks include:

  • Up to 18% APR from staking
  • 20% more interest from MyConstant investing products 
  • 40% reduction in borrowing fees on MyConstant 
  • 90% discount on crypto swap fees on MyConstant 

It’s now available on PancakeSwap for US users, and everyone else can access it directly through MyConstant. Sounds good? Sign up today to start benefiting.

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