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Five Things You Can Do to Get Started in Crypto in 2022

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Five Things You Can Do to Get Started in Crypto in 2022
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LEARN HOW TO TRADE, BITCOIN, EOS, ETHEREUM, LIGHTBLOCKS MEDIA

The blockchain and cryptocurrency sector is a global trend as investors and newbies seek to make a fortune through crypto investment. Some have made millions of dollars in investing in traditional cryptocurrencies such as Bitcoin, Ethereum and some have made millions of dollars investing in memecoins such as Dogecoin and Shiba Inu. 

If you are ready to invest in crypto, you are still early. It’s never too late. If you’re planning to start your crypto journey this year, you are not alone. This article highlights what you need to consider before starting your crypto journey and five things you must do to get started in the crypto sector.

What is Cryptocurrency? 

Before highlighting how you can get started in the crypto sector, let’s talk about cryptocurrencies. Cryptocurrencies are digital currencies that are supported or powered by blockchain technology. Most cryptocurrencies are native currencies of a blockchain network. A blockchain is a distributed ledger enforced by a disparate network of computers. 

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Since everything in a blockchain network is decentralized, there is no central authority making blockchain technology and cryptocurrencies immune to third-party manipulation from central banks or the government. This feature is a major reason why blockchain technology and cryptocurrencies are enticing to many. Another advantage of cryptocurrencies is that it facilitates cheaper and faster transactions, and unlike centralized systems, decentralized systems cannot all collapse simultaneously. 

However, one disadvantage that cryptocurrencies have is that they are extremely volatile. One can be in profits ranging in millions of dollars, and the next minute they are broke as hell.

This is one reason why you need to consider some factors before investing in cryptocurrencies. What are some factors you need to consider before starting your crypto journey? 

What to Consider Before Starting Your Crypto Journey 

Like every other investment opportunity, you need to consider the cost and consequences of investing in cryptocurrencies. No one invests in an asset to lose. So before investing in cryptocurrency, there are four things you need to consider.

Be Ready to Make Your Own Research

Cryptocurrencies involve thousands of these occurrences. There are well over 1000 digital currencies in the crypto sector today. Many people are familiar with traditional cryptocurrencies and popular altcoins such as Bitcoin, Ethereum, Solana, Polygon, Tron, Dogecoin, etc. However, there are still hidden gems in the crypto sector that generate profits when people invest in them. 

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Crypto DYOR
Photo by Marten Newhall on Unsplash

However, to discover these hidden gems, one needs to make adequate research on cryptocurrencies before investing in them. Do not invest in cryptocurrency because someone said you should. If you get info about a particular cryptocurrency, you must do your own research and decide if you want to invest in a cryptocurrency based on your research criteria. Go through the project whitepaper, research their team, and understand the use case the project is trying to solve before investing in a crypto project.

Be Ready to Learn 

The crypto sector is wide, and there are various ways to make money in the blockchain and crypto sectors. DeFi, NFTs, trading, and even blockchain play-to-earn games provide ample opportunities to make money off blockchain and cryptocurrencies. 

Each of these sectors requires that you take your time to learn how it works and how you can earn when investing in them. General knowledge of blockchain is enough, but it is not enough to make profits in these sectors. Whatever way you choose to make money off blockchain and cryptocurrencies, be prepared to learn. 

Be Prepared to Take Risks

Every financial investment opportunity comes with certain risks. Cryptocurrencies are extremely volatile as the value of a digital currency tends to swing high and low. The volatility of cryptocurrencies usually depends on the project’s use case, community support, or trends around the crypto sector. 

Whatever the case is, before investing in cryptocurrencies, make sure that you are willing to deal with the volatility that comes with digital currencies. This is why it is always advisable that newbies come with the mentality of long-term investments. With this mentality, you can remain unfazed when the digital currencies in your portfolio go low or swing high.

Short Term or Long Term Investments?

This is an important factor you need to consider before investing in cryptocurrencies. Be prepared to ask yourself if you invest in cryptocurrencies for short-term gain or long-term profits. Whatever your decision is will let you know what track you need to take to actualize your dream. 

Short or long term investments
Photo by Towfiqu barbhuiya on Unsplash

Most people see cryptocurrencies as long-term investments, buy them, and store them for as long as five years or more than that. Others joined the crypto sector to profit from the volatility of cryptocurrencies for short-term gain. Whatever your choice is, it will be a good idea for you to know before deciding what approach you will take when investing in cryptocurrency.

Is Crypto The Right Choice For You? 

You can make millions from investing in cryptocurrencies. Although cryptocurrencies seem to be the new form of investment, it doesn’t automatically mean it is right for you. One should not invest in an asset because of peer pressure. Take your time to figure out other ways to make money that is comfortable for you. 

Investing in cryptocurrencies can make you wealthy, but it is also important to feel comfortable with your decision. If you are not comfortable or passionate about making money with cryptocurrencies, you will not be eager to do adequate research or take the necessary risks to make profits off the market. 

Five Things You Can Do to Get Started in Crypto in 2022

Here are five things you need to do when starting your crypto journey in 2022. 

  1. Always Dollar Cost Average

The crypto sector is quite unpredictable. There are moments when a particular asset is trending and brings in profits for those who buy and hold them. No one would like to miss out on this. Even professional crypto traders get swept away by the fear of missing out on holding a cryptocurrency that gives everyone high returns. 

To avoid the situation where you stand by and watch people make profits from cryptocurrencies, you should use the DCA strategy. The dollar cost average strategy involves buying a certain amount of cryptocurrency at intervals. With DCA, you can buy $15 worth of Bitcoin every week or every month regardless of the price of Bitcoin. Doing it this way removes the anxiety or pressure of buying cryptocurrencies when it dips or when it’s high.

  1. Know When to Take a Break 

Eventually, while looking for jewels to invest in, you will misread the market. Every trader makes mistakes occasionally, and there’s no need to compensate by raising position size to make up for the losses. This is the polar opposite of what one should be doing.

When you are on a “bad streak,” take a break for a few days. The psychological toll of losses is significant, and it will impair your ability to think properly. Allow that one to pass even if a clear opportunity presents itself. Aside from trading, go for a walk or try to manage your life.

  1. Plan for the Long Term

It doesn’t matter what approach you take; one way to make profits from cryptocurrencies is by investing in solid projects for the long term. You have nothing to lose 

One aspect of crypto that people love is its asymmetric nature. What does it mean? It means that the risk to investing in crypto and the gains are not symmetrical. Whatever you invest in crypto is what you stand to lose. However, one should underestimate the profit you can make from a single investment. How does asymmetric investing work? 

Let’s say you decide to invest $100 into crypto. You only stand to lose $100. However, you can make profits above $1000 with that single investment.  With asymmetric investment, you can turn $1000 to well over $100,000 while you stand to lose the $1000 you invested.

Crypto asymmetric nature
Photo by Joshua Mayo on Unsplash

Assume you have a net worth of $200,000 due to your profession or business, and you decide to invest 5% of it in cryptocurrency. The sum of 5% of your overall net worth is $10,000. It’s only $10,000 that you stand to lose. However, if you invest $10,000 in the right project, you could make ten times your money. Your $10,000 investment might turn into a $100,000 windfall.

When you invest in cryptocurrencies, what you stand to lose is significantly less than what you stand to gain. Consider how much money you would have today if you had invested $10,000 in January 2017. What if you bought Binance Coin (BNB) in January 2017? Your $10,000 would have grown to $469,956 in just two years. That’s a great return on investment from just 5% of your net worth.

  1. Too Many Cooks Spoil the Broth

When trading, you can be tempted to use various indicators when making technical analysis. This is really risky. There are countless technical indicators. 

The Moving Average, Fibonacci retracement levels, Bollinger Bands, the directional movement index, the Ichimoku Cloud, the parabolic SAR, the relative strength index, and other technical indicators are only a few examples. There are countless ways for tracking these indicators when you consider that each one has different settings.

The finest traders know that correctly reading the market is more important than selecting the best indicator. Some people prefer to look at correlations with traditional markets, while others only look at cryptocurrency price charts. There are right or wrong ways to make your analysis unless you decide to use five separate indicators simultaneously. 

  1. Always Look Out for Trends 

Every year, the crypto sector produces a trend where people who invest in it reap huge benefits. The DeFi sector, NFTs, and play-to-earn games are examples of trends that have produced huge profits for those who invested early. 

Always be on the lookout for trends. Identify them, make adequate research, and invest in them before the FOMO frenzy starts. Those who do this reap huge rewards.  

Conclusion

Dealing with money in any shape or form may be a difficult challenge to grasp, especially when it comes to crypto investing and trading operations. If you take your time and follow the easy steps outlined above, you will have the opportunity to prepare yourself to go on this journey without fear properly.

All you have to do now is make adequate research, decide on an investment strategy, set up your digital account, and be willing to take risks.

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