8 Tips for investing in Crypto
Updated: Jun 15
Cryptocurrency can be a great way to make money. Since anybody can start a crypto project, the majority are scams or money grabs. However, there are great projects and a lot of innovations in crypto.
Initially, I did not understand decentralization and crypto. I now understand it as the following: I get to invest in a company, share in the decision making and reap the rewards of a decentralized organization.
Satoshi started bitcoin after seeing how the 2008 market crash affected common folk and how banks and governments abused financial markets. Crypto is supposed to be its own financial entity that benefits common folk.
I have been successful in crypto mining, staking, airdrops, P2E games and defi. When people start trying to make money in crypto, they sometimes make mistakes. I made a lot of errors when I started. I will share how a newbie should approach cryptocurrency.
Tip 1 – Start Small
When you start dabbling in cryptocurrency, deposit a small portion of what you intend to invest in crypto. There is a learning curve in crypto and it can be unforgiving if you make mistakes. For example, if you send crypto to the wrong wallet or wrong chain, you will lose it all.
You are your own bank. If you lose your funds, you cannot call anybody and ask for a refund. This is why it is better to start small and once you learn the basics invest more. I would suggest investing a small sum that you afford on a weekly or monthly basis.
Here are a few exchanges which you can use: OKX, Binance, Kucoin, Mexc, Whitebit, Coinbase, BitMart and BitFinex. I use different exchanges based on what I want to buy and what exchanges have what I need to trade. I find that Kucoin is best for cheap fees. Coinbase has a great learn-to-earn program. Set up two-factor authentication on exchanges to better protect you investment.
Tip 2 – Don’t expect to get rich overnight
Don’t expect to get rich overnight. I see some people coming into crypto expecting to make a quick buck. It is those people who usually take big risks and lose their money. When you invest, have long term mindset and invest only what you can afford to lose.
Tip 3- Identify good projects
There are so many cryptocurrencies now and it can be overwhelming to a newbie. Majority of them will disappear with time and as will your money if you invest in it. There are a few steps to take when identifying a good project.
Read through the whitepaper. If there is no whitepaper or the project isn’t doing anything innovative, be wary.
Check the team and note if they are experienced. If the team is not doxed, take this as a big red flag. Check the website and note if it looks professional. Check their socials such as Twitter, Telegram and Discord. If there is no activity on their socials, stay away.
Check the project's wallets and not if there is a multi-sig and locks in place. If there is no control in place over the project’s funds, this is a big red flag.
Tip 4 Spread out your investment
The old saying “Don’t put all your eggs in one basket.” is extremely relevant for crypto, which is a volatile asset. Spread out your investment. You should expect some of the projects you invest in to fail, even if they appear good. That’s how investment works. However, some will succeed, and you will make money. Don’t throw all your money into that shiny, new project and base your decision on the dream of multiplying your investment. Expect the unexpected.
Tip 5- Employ multiple strategies
There are many ways to make money in crypto: trading, options trading, mining, bots, staking, airdrop hunting, P2E games, NFTs and defi to name some. Using multiple strategies is another way to diversify and lower your risk. Using options trading and bots, you can even make you money in a bear market. Mining can provide passive income as can staking and defi.
Tip 6 -Be Wary of Scammers
There are many scammers in the crypto space whose sole intention is to steal. Never share your seed phrase. Here are examples of common scams.
The scam that advertises that if you send crypto you’ll get more back. These commonly appear on YouTube, Telegram and Discord. They’ll falsely act like celebrities or as major crypto projects.
When someone DMs you on discord, telegram and reddit about crypto, don’t trust them. They usually say they’re part of a project and send you links via which you can purchase rare, enticing stuff related to the projects like IDO tokens or NFTs.
There are many phishing scams floating around. When you visit their site and connect your Metamask wallet and give permission to the site, they’ll drain your wallet. Only access sites via trustworthy sources like Twitter and Discord. When you google a project, check if you are clicking on an ad because this can be a phishing scam.
Some projects start with the intention of rug pulling and scamming early investors. These projects try to create and attract investors. They appear flashy and have no real utlity or use case. They employ clever marketing strategies and create hype. Usually, they convince people to invest in an IDO or NFTs, with promises of exponential returns. The team usually doesn't dox. Once they launch their token or have enough money, they'll drain the liquidity, making the coin worthless as well as your investment. To prevent being caught in the cross hairs of these scammers, invest in solid projects with good utility.
Tip 7 – Cold Wallet
Invest in a cold wallet to protect your investment. Get a Ledger, or another cold wallet to protect your investment. Here is a referral link to cold wallets on Amazon. You must give permission for transactions, whiih will protect you from phishing scams.
Tip 8 – Get into projects at the right time and take profits
Crypto is a volatile asset and don’t FOMO in. Try to get in at the right time. The right time would be early and during dips.
Check the tokenomics and note if it is inflationary and if there are token release schedules that release tokens/coins to the team or venture capitalists. The price usually dips after coins are released so buy after this.
Dollar-cost average and stock up during bear markets. Take profits when prices go up.
This all may seem like a lot, but it isn’t when taking it considering the amount of money floating around in crypto. You should approach crypto like a job. You are trained before you go to work. There are skills that you must learn to be successful in the workplace.
In conclusion, crypto is like the wild west. It is exciting and there are many ways to make and lose money. Learn, protect your assets and come out on top. Invest what you can afford to lose.