Successful Cryptocurrency Investors Share Secrets To Success And How To Avoid Loss
Cryptocurrency has become an incredibly popular investment in recent years, but there are still questions surrounding its profitability.
The rise of Bitcoin, which has seen its value soar over the past few years, has got many people interested in cryptocurrencies. As a result, there is an incredible selection of cryptocurrencies, whose founders have high hopes of increasing in value.
Reasons for investing in cryptocurrencies have ranged from memes to cults of personality. Nonetheless, questions still linger about whether emerging cryptocurrencies can take off, and if the time for ordinary people to invest and profit has come and gone.
Fortunately, investors sat down with UNILAD to give insight into the future of cryptocurrencies. These investors include those who made serious money from the early days of Bitcoin.
Speaking about whether normal people, without thousands of pounds to risk, should invest in cryptocurrency, Reddit user Kindest_Regards, who began investing 10 years ago, mentioned a phrase that got him involved: ‘The best time to buy bitcoin is 10 years ago, the second-best time to buy it is today.’
Other people who invested in cryptocurrencies when they first began to see success, offered similar advice, although they also noted ways to ensure that investment was wise.
Joël Valenzuela, who has been featured on CNN for using Dash for all of his everyday transactions in New Hampshire, offered advice on how to see if a cryptocurrency is a wise investment:
My most sincere advice is to actually use the stuff. Buy a bit of a few different coins, then try to do with them what it’s advertised that they’re supposed to do. Just doing this is a real eye-opener, and you learn really fast which projects actually work and which don’t.
Another long-time crypto investor, who asked to be referred to as Ty, claimed that they went on to make more than one million dollars by investing what they could when they could from 2016. Ty said that people should ‘have a long-term vision, and use what funds you can that won’t affect your daily/monthly budget’. It is worth noting that this kind of advice is sound in most investments.
The investors also gave insight into where they see small investors in the greater scheme of cryptocurrency investments.
I think small investors have a place. If you make money off your investments then you can eventually become a big investor. It’s all about your starting point and a thousand small investors is often a lot more than one large investor, so I think its important.
Valenzuela echoed this support for smaller investors:
The beauty about this technology is anyone can participate, no matter who they are or where in the world they are, without asking permission from anyone.
Once people start going straight into crypto without having to buy with government currency first, I think we’ll especially see lots of people who have been left out of the old financial system start to take over.
Despite stating that smaller investors have a place in the market, Ty still compared the market to the ‘wild west’. Due to the decentralised nature of cryptocurrency, its value can fluctuate sharply and leave people out of pocket. Equally, some currencies are designed to be a profit for the creator rather than a viable currency.
These factors have led to people losing money in the cryptocurrency market. Ty discussed one example:
From reading comments online, I know a lot of people lose money because of overtrading or trading on margin; both dangerous behaviors that could wipe out an account easily, whether crypto or any other more conventional investment.
One client of mine lost all his crypto because he used passwords that were too simple and often repeated among accounts, nor did he check the account for unauthorized transactions or take steps to strengthen his security. In a matter of a few months, his $75,000 balance was wiped out.
Cases of people losing money in cryptocurrency endeavours are not unique, and Valenzuela also mentioned that he knew people who had lost significant amounts. He pointed to people investing in scam cryptocurrency as well as the surge in Dogecoin. These more impulsive endeavours have led to people losing money. Shortly after the conversation with Valenzuela, the value of Dogecoin plummeted.
Despite initially getting a lot of people to invest in Dogecoin, Elon Musk recently made some disparaging comments about the cryptocurrency. The fact that Dogecoin has been so volatile and seemingly changes with the mood of the business magnate has led to calls for Musk to be banned from Twitter.
The majority of people who spoke to UNILAD encouraged long-term investments rather than hopes for a get-rich-quick scheme. This makes sense given that the incredible profits Bitcoin investors saw came after the best part of a decade. However, there were also stark warnings, including that those who are not from an ‘upper middle-class’ would not be able to live off the currency alone.
It seems that having a long-term vision is essential in the cryptocurrency market, and with that in mind, the investors have suggested that an average joe could make money in the market. Nonetheless, like any investment, more capital will lead to a greater return, and it is placed at the buyer’s risk. This risk is particularly poignant considering hedge fund manager Michael Burry, who foresaw the 2008 crash, has warned about the impending issues in cryptocurrencies.
In this instance, those who managed to pick the right cryptocurrency a decade ago have seen a return on their investments at a much better rate than your average ISA. While this could in theory happen again, it may be a very bumpy road for even the smallest of investors.
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