Crypto assets are increasingly reaching a wider audience. Prices are always rising, of course, is a special attraction for new investors. In addition, they must also be aware of the risks. The famous investor like dan hollings are also active to share knowledge with their followers about investing in cryptocurrency. Here are 6 things you need to know before buying anything.
1. Put according to your ability
Crypto assets are riskier than many other investments. There are no guarantees other than volatility. There is no insurance and certainty in this market.
2. Do in-depth research
Go to community forums and developer mailing lists, listen to the opinions of long-time investors, or even look for books that can explain in detail, not only about crypto assets but related fields such as cryptography, game theory, and economics.
3. Never be afraid to lose the moment
Many people have reasons to invest in something because they don’t want to lose momentum. There are many examples of cases where investors lose money due to Fear out of missing (FOMO) and forget other important elements.
4. Beware of unit bias
Not all coins are created equal. There are many crypto asset contracts, some of which are unique and different from existing coins but others that imitate old coins. They all have varying degrees of developer support and are decentralized.
5. Understand the tax consequences
This is especially important in the US, for several reasons. The result is that if you buy a $1 coin and it doubles in value and then spends that extra dollar on a pack of gum, you are required to report it.
6. Don’t obsess over the price
The market will fluctuate every single minute. However, any cryptocurrency is valuable, any investment is worth it, is a long-term bet. Uses dollar-cost averaging (DCA).