10 Rules For Investing In Crypto

Here are some rules new and experienced investors should follow when investing.

1. Have a Strategy

An investment strategy involves planning the means to reach a desired end. Always ask yourself: what is my end goal?

Are you investing in crypto as a hobby?

Are you investing to make millions?

Each goal has an appropriate approach to follow, so tailor a proper strategy to achieve your goal.

2. Never Invest More than You Can Afford to Lose

The biggest mistake investors make is throwing everything they have into an investment. Then, when the market goes down, they lose everything.

Be prudent.

Instead, look at your finances, determine how much money you need to survive a year to a year-and-a-half unemployed, and have that amount on hand for a worst-case scenario.

Once you have your finances squared away, determine how much money you can risk losing and devote that amount to your investment.

3. Know Your Level of Risk

Speaking of risk, investing is always risky, and that is even more the case with cryptocurrency.

Anyone who looks at a price chart for Bitcoin or any alt-coin will see that their value fluctuates up and down wildly.

Are you willing to go on that roller-coaster ride? For how long?

4. Diversify or Die

Mitigate your risk by diversifying your portfolio. That means putting money in several different investments. That way, if one goes belly-up, you still have several others alive and kicking.

Invest in several coins you think are promising, and also put some money in stocks, real estate, and other investments besides cryptocurrency.

5. Secure Your Investment

Cryptocurrency is highly attractive to cybercriminals because it is easier to steal from hot wallets than bank accounts.

Keep your cryptocurrency secure by keeping most of your funds on a hard wallet and only what you immediately need on a hot wallet.

Never share your private keys, passwords, or recovery phrases with anyone.

Keep your hard wallet in a secure place like a safe.

And never, never, never keep your funds on an exchange.

6. Knowledge Is King

Know what you are investing in before you put your money in it. The best way to do that is to read the coin or token’s white paper and what other investors have to say about it.

Also, keep track of the news, as current events can positively or negatively affect prices.

For example, anyone who was paying attention to the news during the Covid pandemic could have guessed that money printing would cause crypto prices to jump. Whoever predicted that and invested accordingly reaped significant rewards.

So always pay attention to the world around you. It can offer insight into the future of the market.

7. Beware of ICOs

Initial coin offerings (ICOs) offer investors a unique opportunity to cash in on a new coin. But they are also tools for the dishonest to fleece novice investors.

Some people create coins to manipulate the price, only to turn around and engineer a massive sell-off.

They may make millions, but that comes at the expense of leaving investors high and dry.

Telling whether an ICO is legit is difficult, so be careful when investing in one. As with point #6, do as much research as you can before investing in an ICO.

8. Sell High and Buy Low

Most people get caught up in the excitement of the bull market and start buying. Then, when the market goes bearish, they want to sell.

That’s completely backward.

Bear markets are the time to buy, and bull markets are when you sell. Don’t get that mixed up, or you can expect to lose a lot more than you stand to gain.

9. Don’t Make Emotional Decisions

Every decision you make with your investment should be well thought-out and considered before execution.

Do not make hasty decisions with your money.

Take a day, or at least a few hours, to think on matters, or even sleep on it, and then decide.

As my wife is prone to say, “The morning is wiser than the evening.”

10. Cut Out the Bad Advice

A lot of advice–especially predictions about cryptocurrency–is rubbish that is pushed by those shilling their favorite coins. This includes the $100,000 Bitcoin prediction, which was off the mark by around $30,000.

I guarantee some greasy bastard who invested in Bitcoin paid dearly for that prediction.

Disregard all the clickbait, and be your own expert. Never trust advice or predictions that promise pie in the digital sky

Final Thoughts

Crypto is risky enough as it is, so establishing some ground rules to follow can help keep you out of financial trouble.

When you’re ready to start investing, whether for play or for profit, do so with your own limitations in mind and lay your money down accordingly.


Curious about investing in NFTs? Read what Kit Campoy has to say about Miami’s recent NFT event.

Or, if you prefer something more serious, dig into my thoughts on why Miami will become a major crypto hub.

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