Have you been thinking of diving into the crypto world but do not know how to go about it? Maybe you have heard of how someone became a millionaire through Bitcoin, or your friend made some cool cash by buying a meme coin? First, I want to say that I can understand how left behind you can feel when you hear all the crypto buzz on the internet.
Second, the crypto space is fast-paced. Therefore, you have to be careful, especially when money is involved. Indeed, cryptocurrency is a powerful tool to build wealth. But, like every other opportunity, it comes with its risks. So, in this guide, I will walk you through 10 key tips that will help you make smart and confident decisions as a crypto investor.
Let’s get into it!
KEY TAKEAWAYS:
- Successfully investing in crypto starts with being informed to avoid impulsive decisions.
- Because the crypto market is unpredictable, you should invest only what you can afford to lose.
- You can start with fractional investments in crypto before scaling up to larger amounts.
- Always stay updated on changes in the crypto world so you can make better decisions.
10 Best Practices To Keep in Mind As A Newbie in Crypto Investment
Building wealth with crypto does not have to be rocket science. You can follow these practical steps to make the most out of the crypto financial revolution.
- Start with Education, Not FOMO
It is not true that you have to get into crypto before it is too late. That is just fear of missing out (aka FOMO) talking. The crypto journey is not a sprint; it is a marathon. As such, you should invest in learning before putting in your money. When you are better informed, you have won half of the battle because you are less likely to make emotional or impulsive decisions.
- Only Invest What You Can Afford to Lose
Crypto markets can swing wildly in a matter of hours. That ₦100,000 you put in today could become ₦200,000 or ₦50,000 next week. It is not always predictable. So, please don’t invest your rent money, school fees, or your emergency savings. Set a separate budget for your crypto journey. Also, ensure it is something that won’t wreck your life if things don’t go your way.
- Pick the Right Platform
The platform or exchange you choose is your entry point into crypto. As such, you should pick a reliable, secure, and beginner-friendly one. Look out for strong user reviews, a simple interface, low fees, and fast Naira or Dollar withdrawals. Some trusted names include Binance, Coinbase, and, for Nigerian users, platforms like Koyn, which allow you to sell crypto for Naira instantly and securely.
Read Also – Crypto Wallet Types: Custodial vs. Non-Custodial Explained
- Understand Different Crypto Types
All cryptocurrencies are not created equal. There is Bitcoin, often called “digital gold,” which is typically used as a digital store of value. Ethereum powers many decentralized apps, and stablecoins are pegged to stable assets to reduce the risk of volatility. So, before buying any coin, ensure it fits your financial goals.
- Start Small and Scale Gradually
You don’t need to buy a full Bitcoin to be a crypto investor. In fact, most platforms let you buy fractional amounts of crypto with as little as ₦5,000. Also, get comfortable with sending and receiving coins. Once you build that confidence and your knowledge deepens, you can increase your investment bit by bit.
- Consider Using a Wallet
If you leave all your crypto on an exchange, you don’t really control it. If the exchange gets hacked, freezes withdrawals, or goes bankrupt, your funds could be at risk. That’s where crypto wallets come in because they give you control over your assets.
Crypto wallets are of two types: hot and cold wallets. Hot wallets are online and good for everyday use. Alternatively, cold wallets are offline hardware devices and are best for storing large amounts safely.
- Have a Clear Investment Strategy
It is not advisable to do random buying when it comes to crypto. Instead, you should have a plan to avoid emotional decisions. Some strategies you can consider include HODLing, dollar-cost averaging (DCA), swing trading, and altcoin rotation. Once you choose a strategy, stick with it irrespective of how the market fluctuates.
- Track Your Portfolio
When you own multiple coins across different platforms and wallets, things can get messy. One of the easiest ways to stay on top of your investments is to track your portfolio. You can use apps like CoinStats, FTX, and Delta to track your profits, losses, and entry prices. It’ll help you see what’s working and where you might need to adjust. You’ll also feel more in control, which builds your confidence as an investor.
- Prepare Emotionally and Financially for Volatility
Crypto is volatile, and it is just what it is. You can’t control the market, but you can control how you respond. Here are some quick mindset tips:
- Don’t check your portfolio every hour, so it does not mess with your head.
- Stick to your plan instead of selling in panic or buying in greed.
- Do not be ashamed to take profits along the way.
- Avoid trying to perfectly time the market because it is nearly impossible.
If you treat crypto like a get-rich-quick scheme, you’ll likely burn out or lose money. However, if you stay level-headed, patient, and consistent, you increase your chances of success.
- Stay Updated and Join a Community
There is always something happening in the crypto world. Be it new projects, updates, regulations, or hacks. As such, staying updated helps you make better decisions. You can follow crypto blogs, X (formerly Twitter) accounts of legit experts, and join Telegram groups for this purpose. But be careful not to take every piece of advice as the gospel truth. Always verify before you act on them.
Final Thoughts
There’s no perfect way to invest in crypto, and mistakes are part of the learning process. Nonetheless, you now have a powerful edge that most people do not have because you are educating yourself first. Take your time, ask the right questions, and stay cautious as you move forward. Before you know it, you will be able to approach your crypto investment with much more confidence!
References
- investopedia.com – 10 Rules of Investing in Crypto
- qz.com – 10 golden rules before investing in crypto
- bankrate.com – How to start investing in cryptocurrency: A guide for beginners
