In this article we delve into the most critical realizations and implementations a newly established crypto investor should understand and enact early on, so as to ensure that they have a concrete base at which they can initiate their crypto career from. Studies have estimated the proportion of investors who succumb to a net loss within cryptocurrency, and have found that as much as 95% of investors can and will money. On the flip side, those who preemptively gain the knowledge necessary to succeed within the crypto-space often capitalize on the inordinately high returns inherent to the crypto-industry when one trades intelligently and in a systematic manner.
While this article’s breadth cannot go over all the subtle intricacies that make up a competent crypto-investor within this space, we will dive into some of the most critical points a new crypto-investor should know before making their first deposit within the bustling marketplace that is cryptocurrency.
#1 - Buy the Potential, Sell the Hype
This quote draws many parallels to the quotes ‘buy low, sell high’ or Warren Buffet’s ‘be fearful when others are greedy, and greedy when others are fearful.’
A crypto investor should do their due diligence in understanding what a project can potentially provide before it actually launches its applications within the space. If through your research, you find that a project has strong and widespread application within the crypto-space, you should then look at its respective price charts (most will be found on CoinMarketCap or CoinGecko). From here, you will be looking for something that 95% of other investors actively avoid: A low price evaluation within the market.
Most crypto-investors hear from crypto influencers or news headlines of the uprising of a particular project, and ‘ape’ impulsively into it, only to be disappointed by the project’s market evaluation dropping below their buy price soon later. What occurred here is that knowledgeable traders did their research on this project before it actually launched its application within the space, at which point they bought into the project at its pre-exposure undervalued price, and sold the hype once it hit mainstream exposure. To this day (October 15th 2021), the vast majority of investors still buy the hype and do not do their research to capitalize on undervalued prices beforehand.
By doing your research on a project that has high potential within the crypto-space, and is still not known amongst the mainstream investing communities (and is reflected as such within the price charts as being undervalued), you will be ahead of the 95% of investors who blindly follow the pack off the countless financial cliffsides situated across the crypto-space.
#2 - Maximize Your Security Protocols
While this may not be the most dopamine-stimulating concept behind initiating your crypto-career, it is by far the most important.
Stay away from downloading uncertain software on your crypto-device, as it only takes one bugged application that you install that could have keylogging virus functionalities connected to it, and result in them retrieving your private key directly through this virus.
Lastly, always double the location sites of your private keys; One should be encrypted within your most secure device (there are many online applications that provide encrypted services), and the other as a physical copy in a tamper-proof and undisclosed location.
Your private key is everything; It doesn’t matter how rich you become within the crypto-industry if you cannot access your funds.
3 - Pinpoint the Next Trend
For example, those learning from experts a year ago would be investing in all things DeFi, whereas those researching in October 2021 are investing in Decentralized Gaming (DeGaming) and the DeFi that bolsters their Play-to-Earn and token trading functionality. What do these terms mean? Well, that’s kind of the point; You need to know the intricacies of the sector you are investing in. Rather than be a Jack of all Trades, be a master of one sector of the crypto-industry, and your investment decisions will become more informed and likely more successful over time.
4 - Always Look 3 Months Ahead
This is similar to our 1st critical point, where most investors are looking for what could be occurring in the next 1-4 weeks, you should be looking at least 12 weeks ahead. Doing this, you will invest on the undervalued projects ahead of the hype, ride the 1-2 months of exponential rise stimulated by said hype, and eventually sell back your initial investment plus 30-80%. You will sell once the project becomes considerably overvalued from all the ape investors amplifying its price within the marketplace, which will occur once it hits mainstream exposure, usually within the final month of the project’s launch of its new application. This way, you will have made profit from your investment, and still have a generous lump sum within the company which can potentially further appreciate with future installments to the project’s evolution.
This is how you can safely make profit within cryptocurrency, whilst building up a collection of ‘moonbags’ throughout your investing journey.
As you can see now, there are both perceptual changes and preemptive measures one must take to ensure success within the crypto-industry. Understanding to invest in high potential projects which still lack marketplace exposure is critical. Additionally, you want to ensure that these projects have monumental updates at least 3 months in the future, as this will increase the likelihood that you are getting in at a low price with high potential for further growth within the coming months.
Synergize this investment strategy with becoming highly knowledgeable within the uprising sector trends in the crypto-space, and your investment success will be further bolstered.