5 tips to know before investing in cryptocurrencies

Warning: any type of investment carries risks. Exercise due diligence and conduct your own research. Act in a prudent manner and do not invest more than your goals or financial means allow.

5 tips to know before investing in cryptocurrencies

1. Educate yourself: it is important to understand how the cryptocurrency market works and the crypto-assets you want to invest in. The financial regulations that frame the cryptocurrency market are still limited due to its young age. This exposes the market to greater opportunities for fraud and manipulation.

2. Diversify your portfolio: don't put all your eggs in one basket. Consider investing in a variety of cryptocurrencies to spread your risk. This diversification tip can also apply to the exchange platform you use and the type of wallet you store your cryptocurrencies in.

3. Keep an eye on market trends: stay on top of news and market trends in the cryptocurrency space. The cryptocurrency industry is very large and there are many different topics related to it, such as NFTs (Non-Fungible Tokens) and DeFi (Decentralized Finance). It can be difficult for one person to master them all, as each of these topics can be technical and require some specific knowledge. That's why it's important to take the time to educate yourself and understand the topics you're interested in before making any investment decisions.

4. Use a secure wallet: it is important to store your cryptocurrencies in a secure wallet to protect them from threats. There are several types of wallets, including physical/hardware wallets and wallets in the form of a browser extension or mobile app for example.

To learn more about the different types of wallets, click here to read our article "Choosing the Right Wallet: Understanding the Basics".

1. 5. Be prepared for volatility: cryptocurrencies can be very volatile, and the value of your investment can fluctuate dramatically. Therefore, it is possible to suffer significant losses in a very short period of time. The crypto market is still young, not widely adopted and less liquid than other financial markets. It is essential to prepare for it, understand the risks associated with investing and have a long-term investment horizon. Do not invest more than your financial means allow.
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Bonus tip?

6. Define your goals: Defining your goals is an important aspect of investing. It is necessary to create an investment plan to achieve those goals. Not setting your goals beforehand leaves you open to making rash decisions that do not fit your plan or your financial means and needs.

Feeling ready to start investing in cryptocurrencies but don't know where to start? Head over to our Academy to learn more about cryptocurrencies.