Don’t buy low-quality coins in the hope that you can purchase Lambo or private jets. There are many uneducated investors in the crypto world where they buy a cryptocurrency at low prices because they think the profit potential will be far higher. If one coin is priced at ten and the other one is priced at 150. Most investors will buy coins at ten because they think it will be easier for coins to go up from 10 to 20 than coins at 150 go up to 250.
This is a common trap. Several main factors affect the price of coins/tokens, namely circulating supply (the number of tokens in circulation) and the value of the coin itself. But it is not uncommon for cheap coins to have a circulating supply, which can weaken the price of coins. If the token’s circulating supply is very large and has minimal value, then if the token/coin is priced at ten, then the currency is not undervalued and should be given a low price. If you want to know how to start bitcoin trading then you can get useful information here at bitcoin billionaire.
Another way to consider the potential development of a coin is the market capitalization of the coin. Market capitalization can be calculated using the following formula: current price times the circulating supply. Sometimes this market capitalization becomes a better indicator for investors to assess the valuation of the coin.
If you want to invest in coins/tokens that will be the next prima donna, you can invest in coins with a low market cap. Why? Because coins with a small market cap tend to prefer the potential to develop, they also have a higher risk when viewed from the side.
Cryptocurrency investment should not immediately take this type of coin/token as your investment instrument and choose another coin with value in its implementation.
Though investment is a game of speculation where you need luck in trading, even big investors, to minimize losses and maximize profits, you need to enter an appropriate nominal investment amount. For example, if you multiply your investment by 55%, you can also lose your investment by 45%.
You made a careless mistake.
One of the most common mistakes made by cryptocurrency investors is mistakenly entering the destination address when transferring. When you transfer, you should not be in a hurry and make sure the sender’s / recipients address is correct. Make sure you do not retype the address given, copy and paste. Besides being faster, of course, it will minimize errors in typing addresses. After you copy and paste, always verify the first two characters and the last three characters again.
A portfolio that is not diversified
Just like other types of investment, cryptocurrency investment should also be diversified. Although you will be tempted to invest in large quantities at once, keep in mind not to put all your eggs in one basket. Every experienced investor protects their assets from the risk of loss by diversifying assets. You might see some correlated coins when one coin goes up, and the other currencies will go down. If you like the type of coins that will develop in utilities and prices in the future, then you can invest in this type of coin. You should invest funds in at least five types of cryptocurrency.
A portfolio that is too diversified
Although you are advised to diversify your portfolio, you should not expand too much. Because the more diversified you are, the more coins you have to monitor in terms of news and price. You should invest funds in a maximum of 10 types of cryptocurrency.
Do not do research directly.
Please do your research directly. Many investors make investments based on the ongoing hype on Facebook and Twitter. They also usually buy coins at the highest price and sell at the lowest price because of panic at rates that continue to decline—starting from the mission of the project, who is the core team of the project until when the main net will be launched. If you can answer these questions, then that is a good start.
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