The whole world has been talking about cryptocurrencies and it’s no surprise at all that people are looking to crypto to make money. It’s understandable, after all, with all the success stories of teens getting their big breaks or crypto veterans finally striking gold.
That said, it’s not as simple as creating an account on a crypto platform and trading the day away. To be effective with your cryptocurrency purchases and investments, there are a couple of things you’ll first need to consider.
The 10 Things to Consider
We can’t blame newcomers if they get intimidated by all the information surrounding cryptocurrencies. To help get you started, we’ve compiled a list of the 10 things that you should consider before you make a purchase.
It might be tempting to get started right away now that we can buy Bitcoin with credit cards safely, but take your time as you think your way through this. This way, you can be confident when you finally decide to get started.
Check the Price History of the Cryptocurrency
These days, scrolling through social media will likely show a few posts on your feed talking about a specific coin and how it’s been predicted to be the next big thing. It’s easy to be fooled by the trends on social media, so be sure not to make your decisions solely based on these posts.
If you’re looking for something to buy, you can start by checking the price history of the cryptocurrency that’s piqued your interest. This will show you just how stable this coin might be and where its value might go in the future.
Total & Circulating Supply
This is one of those things that might sound boring but is incredibly important for people who want to really get into cryptocurrencies. Let’s define them simply here:
The total supply of a coin talks about how many coins there are in existence, minus any coins that may have been burned. This includes all the coins that have been mined and in possession of the developers, what’s available in the market, as well as those with the general public.
The circulating supply, on the other hand, is an approximation of the coins currently in the market and in the hands of the general public only, basically what’s in circulation.
When it comes to cryptocurrencies and blockchain technology, the community is a very important factor. Before making any purchases, make sure that the community is a receptive and responsive one—any less and you might want to reconsider.
The wallet you choose plays a big role in your cryptocurrency experience. The best Bitcoin wallets will keep you secure while also keeping efficiency as a priority. This makes trading easier and lets you sleep soundly at the same time.
How Much You Can Risk
This is a point that cannot be understated: one of the biggest factors when it comes to your cryptocurrency trading experience is how much you’re willing to risk. Going any higher than that and you may find that you’ll only regret ever getting into trading in the first place.
Your Exchange Platform
You’d be surprised by how much the platform you choose can heavily impact your experience. Different platforms will have different features, but the best kinds are the ones that allow you to transact with a variety of payment methods as this means you can trade almost anytime, anywhere.
The Business Goals of the Blockchain
It’s important that the blockchain of whatever cryptocurrency you’re considering is a transparent one. For these, you’ll normally have to read the developer’s whitepaper documentation to see what their goals are.
Crypto Policies Within Your Country and Bank
Each country will have its own way of handling cryptocurrency trading behavior. Make sure you’re following all the rules and paying the right taxes to make sure that you get to enjoy the crypto space legally.
Your Mental Fortitude in the Volatile Market
You might have encountered the terms FUD (Fear, uncertainty, and doubt) or FOMO (Fear of missing out), terms meant to describe states of mind where you are likely to make a trading error. Keep these in mind and know that good preparation and research are the best ways to protect yourself against these mistakes.
Similar to an earlier point, it’s important that the developers of the coin are transparent with their goals. In that same spirit, you should be able to find documentation of what their goals are as well as their own verified social media accounts where you can find updates on what the developers have in mind and in the works.
At the end of the day, the most important part of this entire journey is that you absolutely know what you’re getting into. It’s the only way to avoid finding something else to blame, ruining your experience altogether. The fact of the matter is that cryptocurrencies are still in their infancy—no one can really predict when one will lose or gain value. Doing your own research is just the beginning as everything after that will be you gaining valuable experience.