There is a lot of noise and excitement on the subject of cryptocurrencies and a lot of people have different opinions. This article is for newer crypto investors, or those thinking about getting into crypto for the first time.
Cryptocurrency is now one of the accepted methods of payment, and several organizations even accept different forms of crypto as payment in place of the regular money we use (fiat money). The world of cryptocurrency can seem overwhelming if you’re new to it. With the proper orientation and guidance, you will have a great time exploring the crypto world.
Cryptocurrency is not something to stumble into blindly, however; there are signs, rules, readings, and other things you need to be familiar with. A lot of people just rush into cryptocurrency without appropriately educating themselves, and more often than not, they end up with a loss. This is one of the reasons why people think cryptocurrency is a scam, when in fact they are just ignorant of the simplicity, beauty and opportunity.
If you’re planning to get into crypto, then this post will hopefully help you make good choices. There are also tons of resources online, so please do your own research. Make sure you check out some of our other articles - the links are at the bottom of this page.
What is Cryptocurrency?
Cryptocurrency is now recognized worldwide and has become a major part of the economy, so it is vital to know what it is.
A cryptocurrency is a form of digital currency, which can be used in transactions for payment, investment, selling, and so on. Cryptocurrency doesn’t exist in hard form, it is purely digital, you can’t see it and you can’t touch it, but it has monetary value. Cryptocurrency is one of the most secure forms of investment or payment because it is nearly impossible to fabricate or make fake copies.
Another fact about cryptocurrency is that it is not owned or issued by a government or any central authority. All cryptos are on decentralized networks, which makes it impossible for any government body or administration to govern or control it.
Cryptocurrency is governed by numerous encryption algorithms and cryptographic techniques like hashing functions, public key pairs, elliptical curve encryptionand public-private key pairs.
When we say cryptocurrency, we’re not referring to just one currency; cryptocurrency refers to any form of digital currency with monetary value. There are many, and each currency has its worth. This is one of the places where people get it all wrong, they have the idea that cryptocurrency is a singular currency (more often than not, just Bitcoin).
If you want to go into cryptocurrency, you first need to know the main options available so that you won’t end up getting confused, or worse, scammed. There are ten major forms of cryptocurrency and each has its monetary equivalent;
These are some of the most popular forms of cryptocurrencies. There are others, but these are safer for first timers and commonly used.
Each of these currencies has a market capitalization; this is one of the things to consider before investing in any cryptocurrency. Bitcoin has a market capitalization of $969.6 billion, for instance, Ethereum has a market capitalization of $222.3 billion, Tethers' market capitalization is $33.1 billion, and Bitcoin Cash has a market capitalization of $13.1 billion.
Knowing the market capitalization of different cryptocurrencies helps in choosing one. The cryptocurrencies with higher market capitalization are usually more stable, just like blue chip stockmarket investments. Market capitalization refers to the size of the cryptocurrency, which means the total worth of the currency in circulation. For example, there is $969.6 billion worth of Bitcoin in circulation so you know it will be safe to invest in Bitcoin right now (the value of the market capitalization may have increased or decreased at the time of publication).
Apart from the market capitalization, you should have a basic understanding of how the crypto market works, the signs that indicate a rise or fall in the market, when to buy and when to sell, and more.
I’ve taken time to explain the concept of cryptocurrency and a little on how it works, because the first step to investing in cryptocurrency is knowing about it.
What is Crypto FOMO?
It sounds like some sort of technical term or type of trading tip, but FOMO simply stands for Fear of Missing Out. Recently there has been a wide surge in the number of people that are investing in cryptocurrency and the numbers keep increasing. Unfortunately, most of the people investing in crypto do it under the influence of FOMO (Fear of Missing Out) and don’t even understand what they are doing half the time. This is very risky and often results in loses and frustration. The problem is that there are also many success stories in Crypto; not just the wealthy but ordinary people making a lot of money. The losses tend not to get written about!
If you’re reading this and your reason for wanting to invest in cryptocurrency is because everybody is doing it, think again. Cryptocurrency is not something you go into because you feel pressured to do it. You need to make a conscious decision to start along with a plan. You need to prepare for losses and have a plan for problems that may arise.
The thing about Crypto FOMO is that a lot of people suffering from it don’t even know they are under the influence. Realizing that you are operating under the fear of missing out is the first step to dealing with it; if you find it difficult to say no to any new trade or investment opportunity, even when it is not convenient for you, then you’re likely suffering from FOMO!
Dealing with Crypto FOMO
Here are some pointers:
The first step to overcoming your fear of missing out is accepting there are bound to be losses sometimes. If you can make peace with this fact, then you’re on your way to a healthy trading life. In the crypto world, it is almost impossible not to make a loss. Even the best people in the world of crypto still make losses, so why put unnecessary pressure on yourself. Once you realize that you can’t have it all in cryptocurrency trading, you won’t have that fear of missing out, driving you to make decisions that you don’t need to make. Our dWeb Article from last week about the Dogecoin Bubble also stressed the idea that you should only invest what you can afford to lose.
Another way to deal with your fear of missing out is to take a look at major losses. Several major cryptocurrency investors have lost all their investments and wealth because they joined a bad trade or made a poor decision. So if you find yourself driven to make decisions out of fear of missing out, remind yourself of these people; this practical method should help curb that unnecessary feeling and stop you from jumping on every investment that comes your way.
Studying the cryptocurrency market is another way to curb your FOMO. If you do an intensive study and get stats on the cryptocurrency market, you’ll realize that you’re not missing out on much. Most of the time, you’ll only see the good parts of trading and investments. What you don’t know is for every cryptocurrency that turns a profit, there are two or more that pack up; so if you see a new investment opportunity and you rush into it, there is every possibility that it won’t last long and you’ll lose your money. So beware of new investments, and don’t rush into anything,, This doesn’t mean you shouldn’t make investments at all; make investments in cryptocurrencies that are well recognized and take time to build on those before rushing off into others. There are more than 1000 cryptocurrencies that have failed completely and are now valued at $0.
Know you’re not the only one to have missed out on a big deal in the past. Most people that suffer from cryptocurrency FOMO have most likely missed out on a big jackpot before, and the FOMO is a sort of PTSD from that experience! If you’re in that category, you need to realize that you’re not the only one who has missed out on a big opportunity; you can read stories or peoples’ experiences on the internet. Realizing this will help you feel better and reduce your fear of missing out. It will also help you stop making impulse decisions.
Remembering your losses as a result of cryptocurrency FOMO. It is amazing how quickly we can forget the effects our previous bad decisions had on us when we’re making new bad decisions. Reminding yourself of the losses you may have already incurred due to a poor or un-researched decision, or just bad luck, and FOMO is an effective way to prevent it from happening again.
How to Invest Wisely in Cryptocurrency
Before you go into cryptocurrency trading and investment, you need to properly educate yourself. There are signs you should look for, you need to understand how to read the market better, you should consider which cryptocurrency will be more likely to make a profit, or at least not disappear.
1. Be sure of what you want to do. If you’re going to invest in cryptocurrency, you can’t listen to the noise. You need to carry out your research, talk to people with experience in this field, read the crypto news, and finally decide on what you want and hold on to it.
2. Expect anything. The market is volatile, prone to changes in a few seconds - prices can go up in an instant and also drop just as fast. If you’re investing in the cryptocurrency market, you need to prepare for anything. There are stories of nervous and mental breakdowns because of the crypto market. If you know your mental state can’t take a lot of pressure, don’t go into cryptocurrency investments.
3. Avoid social media investment strategies. This point is mainly for those that just joined the cryptocurrency market, as they are the ones that fall victim to this. Some social media platforms and groups give out trading tips and investment strategies. Do not fall for them. Apart from the fact that taking trading advice from a stranger is a bad idea, most of these platforms don’t have your best interest in mind and are waiting to make a profit at your own expense.
4. Don’t put all your investments in one place. "Putting all your eggs in one basket" is risky. The best thing to do is to invest in more than one coin, that way if something goes wrong you won’t lose all your investments immediately. Also, research all the coins you intend to invest in and ensure they are among the well-recognized currencies. If you invest mostly in 'blue-chip' crypto, you may be able to afford to take a greater risk in a smaller, more volatile currency.
Cryptocurrency investment is a legitimate means of earning profit, and it has helped many people. Invest wisely and take your time to understand the market, and enjoy yourself! Crypto is an exciting new way to invest, you just have to understand the pitfalls.
Keep an eye on dWeb Guide for news and articles on Crypto, as well as insights into all things Decentralised.