Cryptocurrencies - HOW TO BEGIN?

in #bitcoin7 years ago

January was a difficult month for crypto currency so far. Just looking at capitalization allows to see a deep correction in relation to December increases. The total market capitalization of cryptocurrencies dropped from $ 850 billion to $ 510 billion. For many investors this is the first correction they have to face. It arouses anxiety and panic in them. The cryptocurrency market does not die, it is a natural phenomenon that repeats several times a year. A more important question seems to be how to behave in such conditions?

REASONS TO MAKE A LOWER MARKET
There is no single event that caused this trend. For sure, a lot of uncertainty came from China and South Korea. Many people also mentioned the expiration of the first futures contracts as a potential reason for the interest of many investors in lower prices. However, the most important reason is probably the "overheating" of the market after December increases, when many cryptocurrency has doubled or tripled its value. Many investors then entered the market, not counting on the long-term growth of Bitcoin, but wanting to earn quickly. The same investors quickly sold their cryptocurrencies when the declines began. For all these reasons, we had to wait so long for the correction. Besides, it seems that the January correction takes place every year - occurred in the last 3 years.

HOW TO CHOOSE CRYPTALLOWS IN WHICH SHOULD YOU INVEST IN?
If you're just starting out and thinking about long-term investment, now is a good time to build a portfolio. Do not be tempted by FOMO (fear of avoiding something big) and do not buy weak cryptocurrencies. Do not be guided by emotions during the investment.

First of all, remember to collect information about the project. Visit the website, read the documentation, check the team. If you've done it for over 10 projects, you'll know what to expect. Search for professional websites, clearly defined goals, beware of any potential scams. Avoid cryptocurrencies, of which a considerable amount is in the hands of creators, such that offer "stability and financial freedom". Observe how the project has evolved and what the idea of ​​gaining market share is.

PORTFOLIO DIVERSIFICATION
My friend made a mistake. He only bought ETH when it was at ATH level. At this point, he scored a 25% loss and wonders what to do. That's why you should always diversify the content of your portfolio. Also, try not to invest in too many altcoins.

Separate your capital between stable and risky cryptocurrencies. The largest cryptocurrencies - BTC, ETH, LTC have a large capitalization. They will not disappear from like this.

Also think about what the given altcoin offers. There are cryptocurrencies that want to be a blockchain platform like Ethereum and NEO. There are cryptocurrencies focused on privacy - Verge, Monero, ZCash. There are also financial coins, such as Ripple and Stellar, as well as those focused on technology - IOTA, Cardano and Raiblocks. Each of them is at various stages of advancement.

In summary, it's important to educate yourself and read the information that's appearing all the time. In contrast to the traditional stock exchange, the cryptocurrency market relies much less on technical analysis. You need to adapt quickly and adapt to the changing environment. Of course, you will make mistakes - but remember to draw conclusions from everyone.

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