Join 69,059 users and earn money for participation
read.cash is a platform where you could earn money (total earned by users so far: $ 434,323.36).
You could get tips for writing articles and comments, which are paid in Bitcoin Cash (BCH) cryptocurrency,
which can be spent on the Internet or converted to your local money.
Takes one minute, no documents required
Crypto Basic 101: 3 Basic Knowledge When Investing in Cryptocurrency.
In the last 3 weeks, we have seen how the crypto market breaks down caused by fears and uncertainties, not to mention it technically, making the majority of the assets lost so much in value.
No one had perfectly predicted that a huge market correction was on its way that made a bloodbath in the market with Bitcoin dropped hard to $30,000 (-50%+ from its all time high in April 14, 2021) while majority of alts drop more than -60% from their annual highs.
In this article, I will share some of the most important things in cryptocurrency that I have learned so far that can probably help new people/investors in cryptocurrency gain knowledge about safe trading and investing.
We always knew that being stick to one is one of the best thing that someone can do, but that is only applicable when you are in a relationship and not in investing in cryptocurrency.
When you are planning to invest, never ever just put all of your funds that you have in a single coin/token. Like the motto says, "Don't put all your eggs in a single basket".
Since cryptocurrencies are very volatile and unpredictable, we wouldn't know what and when a certain coins can go up or go down. The logic of diversification is to possibly cover the loss of the coin that you with another coin that can or is making a parabolic run.
Here's an example;
You have $900 to invest in cryptocurrencies and you choose BTC, ETH and BCH assets in where you want to diversify your investments.
So you put $300 in BTC, $300 in ETH and another $300 in BCH.
Overtime, the price of BTC dropped hard and lost -10% value. ETH too have lost -10% in value, but the good thing is BCH price was up to +20%.
Therefore, let's do the math.
BTC $300 - 10% = $270.
ETH $300 - 10% = $270.
BCH $300 + 20% = $360.
270+270+360 = $900.
Even if BTC and ETH both lost a -10% in value, BCH was up by +20% covering your losses from the 2 assets. Therefore you have no losses (yet) from your initial investments.
3 months ago, the CEO of Binance Exchange, Changpeng Zhao once said;
If you can't hold, you won't be rich.
And I, myself, believed in that.
Research says, and this has been proven for some years that long term holders are way more profitable by just holding the assets for a long time than day traders, swing traders, etc.
If you are looking for a long term asset that can really give you high return from your investments, make sure to choose the asset that is fundamentally reliable and strong. An asset with a use cases that can potentially solve a real world problem in the future that only needs more exposure to everyone to be adopted.
A good example of that is Bitcoin Cash, that aims to be a peer-to-peer and decentralized electronic payment.
Fast. Cheaper. And uncontrollable by a single node.
If you seek the long term value of the asset, market corrections should not be a big deal. Because if you sell at loss, you'll be at loss.
Most people in this community of cryptocurrency that takes part in building something for the future, always says that it still too early to jump doesn't mean that you should put the money that you might need in the next couple of days or weeks. Cryptocurrencies with a real use cases are not a get rich quick scheme.
If you want to invest, use the money that you won't be needing for a long time or the money that you can afford to watch lossing value in short term. Prevent yourself to get too emotional and disappointed when the asset where your money was into is losing value, that alone is not a new thing in cryptocurrency.
One of the best thing to do with your money is to buy and forget the asset and get back to it after a few years, and the probability of 10x return from the coin is 99% when you put it in an asset with a very strong fundamentals.