Retail is about to wake up to the biggest wealth transfer in history soon, and most of these new traders and investors will be stung. Here are some tips if you are a crypto newbie.
How to get started
First of all, when entering the world of crypto, you quickly realize that it is a financial playground that is not completely controlled by banks, governments, or Wall Street, at least not yet.
It’s not like the stock market. You don’t need a broker to trade for you. You can set up a wallet. Transfer some money to that wallet. (Your bank allows this) and then set up an account at a cryptocurrency exchange. There are many exchanges scattered all over the internet. and located in various jurisdictions That may require basic KYC (know your customer) details before you can start trading.
Many countries remain negative towards crypto.
You have to remember that large exchanges can be a problem. It depends on the country you live in. For example, would-be traders based in the UK are not allowed access to many crypto exchanges due to geographic restrictions set by the FCA, the regulatory watchdog. country regulations It may take a change of government before UK citizens are able to circumvent this type of censorship in the future.
When and if you can sign up to join a crypto exchange and you can see the offers. With the huge amount of cryptocurrencies available, you might be confused about what to buy.
Be wary of crypto influencers on social media.
Warning! If you follow many ‘crypto influencers’ on YouTube and other social networking platforms, you are likely to come across all sorts of shiny cryptocurrencies that can make you a millionaire overnight. – or so influencers would have you believe.
What these people didn’t say was that They often receive compensation from crypto projects whose virtues they extol. The more people who can buy digital currency, the more people can buy it. The greater the liquidity. This is because influencers join with project founders to sell their tokens to naive retail investors who believe in buying those tokens.
Do your research
Now, before we go any further. Having said that, there are legitimate cryptocurrencies that have some good fundamentals. For example, Bitcoin has a very interesting use case as a store of value, while Ethereum, Solana and Sui are Tier 1 blockchains. Others may be the financial platforms of the future. There are all sorts of cryptocurrencies that are trying to disrupt the rest of the business world, but if you are looking to invest in one of these cryptocurrencies, You will have to further investigate the potential of these currencies.
Memecoin madness
Many new retailers are attracted by the bright light of memecoins. one more time This niche in the cryptocurrency world has the harshest level of warning possible. To put this in perspective, Memecoins has nothing to back it up. Except for the belief that they will increase in value as more people jump on the latest pump to the upside.
No doubt you will come across stories of traders making millions by backing one memecoin or another. Yes, this has happened. But how many traders are rich here? not a lot
With good knowledge about trading and may have been acquired over the course of a few years. There is a possibility of some success here. Without this It is also the case of sticking the tail on the donkey.
A safe bet is Bitcoin.
When it’s all said and done A good and safe bet would be Bitcoin. Yes, there can be strong swings both up and down. And there is a bear market at the end of a typical 4-year cycle, where Bitcoin could lose more than half its value.
However, if you invest in Bitcoin, your time horizon must be at least a few years. It is 100% clear that the purchasing power of your fiat currency will decrease over time. And during this worrisome time It tends to be at a rapid rate of acceleration.
Over a reasonably long time frame, Bitcoin has proven to increase in value relative to almost every other asset class. Buying and holding it can be a less stressful hobby than trading altcoins or memecoins. a lot Think long and hard about this.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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