Johannesburg, 16 Jul 2019
There are several common mistakes which the novice cryptocurrency investor should take note of before investing in crypto. Below are the most common pitfalls new investors make.
Avoid these common pitfalls in crypto investing
As an investor, you need to know and understand what the coin resembles and develop a good understanding of its trading history. Should you be interested in buying Bitcoin, firstly understand what Bitcoin is before you buy or sell Bitcoin as it is not the same as trading gold, silver or shares on an index. Invest the time that's required for you to build an understanding of the cryptocurrency landscape and ecosystem before you go on an extravagant buying spree. Invest only as much as what you can afford to lose.
Starting out in cryptocurrency
At the onset of your journey in crypto investing, you need to understand all the fees that are involved in a trade. Consider the fees associated with deposits, withdrawals and trading that come standard with any trade. Also, conduct an end-to-end investment and disinvestment analysis with a small amount of money before you go all in.
Before completing the actual investment, identify the best exchange that's able to take your fiat funds, one which has the lowest fees and offers trade pairs (BTC and ETH) on the coin you are seeking to invest in. It is important to know where to buy and sell the crypto and know that the exchange has the liquidity, eg the volumes (supply and demand), for the coin you are trading in.
Crypto storage
Securely storing your crypto assets is crucial once you have purchased your holdings. It is advisable not to store your crypto on an exchange. Exchange hacks are, unfortunately, still a widespread occurrence in the crypto asset markets. Some of the most prominent global exchanges have been prone to attacks. There's a wide array of digital wallets available; it is important to store your holdings on a secure wallet.
Beware of scams
Beware of scams asking you to send them BTC or share your wallet key via an untrusted source. There are several scams that will exploit the hype around Bitcoin, including ones where users are drawn in by offering them “a limited time to invest” in a project or receive a 10% discount for an investment. And don't send your funds over to anyone offering high returns.
Don't be greedy; take profits in a timely fashion as cryptocurrencies are volatile. Prices are volatile: People get scared and sell assets when prices plummet, then suffer from "Fomo" (fear of missing out) and purchase when prices surge.
Lastly, ensure that you bequeath your crypto assets and the wallet keys in your will to your beneficiaries as part of your estate planning.
OVEX offers a fiat on ramp allowing South Africans to buy and sell cryptocurrencies with South African rands. The company offers over 20 coins and unique features such as a crypto interest account and token faucet, allowing users to buy cryptocurrencies at international rates, thereby leapfrogging the price disparity experienced in the South African market.
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