Blockchain technology provided an opportunity to create wealth for millions of aspiring people worldwide.
This technology and cryptocurrency market’s importance is through its ability (technology) to change the world’s features in various areas of life, whether from economic, financial, political, social, or other aspects.
These areas have many problems that traditional methods have failed to fix or find practical solutions to them.
This article will discuss cryptocurrency in terms of investment by highlighting many aspects that should not be overlooked by those wishing to invest in this market.
Find your place in this market
Everyone who wants to invest in this market should be aware that investing is usually based on fundamental principles that must not be ignored. We notice the lack of sufficient awareness about this issue. Despite this, a lack of a proper understanding of basic investment principles may cost investors all of their capital.
One of the essential principles of investment is that any investment has risks. Still, investment and risk are two things that are linked directly to each other, so whenever the risk is high, the expected investment returns are high. Every investor must be well aware of the risks, evaluate them, and not make any decision without taking risks.
We also emphasize one of the most common investment principles (invest only the amount you can afford to lose). Avoid borrowing for the sake of investment, and do not let greed leads you.
If you are a small investor, do not put all of your life savings in the market. If you are an institutional investor, do not put all of your capital in one basket and stick to the principle of diversification.
One of the primary investment principles is a secondary market for trading investment instruments (trading platforms in cryptocurrency). The investor must choose the cryptocurrency and trade them on known trading platforms. He should also decide to secure trading platforms and digital wallets and document his accounts to prevent future problems.
After we have briefly learned about some of the most important investment principles, let us summarize for you the most critical points that you must follow:
1. Providing the capital allocated for investment in this market emphasizes the principles that we mentioned previously.
2. Convert your capital (traditional money Fiat) into cryptocurrencies by purchasing one of the following, BTC, USDT ETH. Do not forget to negotiate and buy at best possible.
3. Be sure to choose the most popular and safe trading platforms with sufficient liquidity to enable you to buy and sell cryptocurrencies at fair prices. The liquidity of the platform is just as necessary as the importance of its security.
4. Make sure to document your account on the platform and upgrade it to a higher level so that you have sufficient safety not to suspend your account in the future.
5. Keep the data of your accounts in a safe place. It is preferable to keep it digitally in storage devices that are not connected to the Internet and. Also, keep a printed copy for reference when needed.
Dealing with the risks of the cryptocurrency market
Cryptocurrencies, as modern investment tools, have investment risks. But there are other risks that the investor must be well aware of and pay attention to, and we will list here some of the potential risks that every investor should take precautions for:
1. Risks of stealing your investments: The fact that the investment is in digital form is vulnerable to theft, and one of the most ways of theft is hacking into trading platforms (not the blockchain, because the blockchain has proven its effectiveness and safety over the past years), so we also indicated that it is preferable to transfer your investments after purchasing them from the platforms to wallets.
2. Risks of removing some cryptocurrencies from the platforms: Every period, the trading platforms evaluate the cryptocurrencies traded in those platforms. The platforms may decide for one reason or another to remove some currencies from trading, so it is preferable to follow up on your investment currencies periodically.
3. Risks of not being prepared for the Swap process: Many cryptocurrencies depend on the Ethereum blockchain (or another blockchain).
Many platforms support the swap. All you have to do is periodically follow up your currencies, know the time allocated to the swap process, and then return your cryptocurrency from the cold wallet to the platform.
After completing the swap, choose the new wallet that supports the new symbol for your currency and transfer your currencies from The platform to the new wallet.
4. Risks of wrong dealing with wallet addresses: In the cryptocurrency market, you deal with the language of the machine (zero and one), and any mistake may cost you a lot; one of the common risks is sending currencies from one wallet to another wallet but wrongly, such send the currency to a non-wallet address, or to send it from a wallet address in a particular blockchain (for example, the Ethereum blockchain) to a wallet address in another blockchain (the Bitcoin blockchain). In this case, you may lose your crypto forever.
Note that each blockchain’s wallet addresses begin with a specific letter that distinguishes them from another blockchain’s wallet addresses.
5. Fraud risks: You may face a lot of fraud in this market. There are many fraud methods that you can meet, such as being motivated to send your cryptocurrency to a specific address in exchange for something.
6. Risks of losing investment portfolios data: Each investment portfolio has two private keys, the first is called Public Key, which represents the address of your portfolio, and the second is the Private Key, which means the code that enables you to deal with your portfolio, in addition to some security codes at other times.
What the best cryptocurrencies for investing
Choosing the right currencies for investment is not as easy as many think because the market has more than 2000 cryptocurrencies that make the selection of digital currencies very difficult. The selection process is a bit complex, and portfolio building needs attention to get the most out of your investment.
How to build the idea crypto portfolio
1. Choose the most efficient cryptocurrencies that can bring you the highest possible returns.
2. Choose the appropriate time to buy the currency and choose the most suitable price level for its purchase.
3. The optimal distribution of the portfolio composition through the allocation of risks and opportunities in a balanced way.
The Cryptocurrency market is a promising market that provides good investment opportunities for individual or corporate investors. Still, this market’s investment process is governed by several considerations that must be taken into account, as there are risks associated with investing in this market that everyone should be aware of and work to avoid as much as possible. Also, profitable investment requires building an optimal investment portfolio and managing it properly.