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Six Factors to Take into Account When Purchasing Cryptocurrency

by Kim GreeneNovember 18, 2022,

There is different and misleading information about cryptocurrency, painting it as a means to get richer quickly, making it a lucrative option for many, especially for those with limited or wrong information. Guided by such information, there is a higher probability of losing your cash during the purchase or incurring future losses for a wrong investment decision. 

When you are looking for a relatively safer investment or an asset to diversify your investment portfolio, cryptocurrency is among the first choice for people. Despite being safe and an ideal diversification strategy, you should consider various factors to help you invest wisely and safely.  

Woman is checking Bitcoin price chart on digital exchange on smartphone, cryptocurrency future price action prediction. Closeup - Woman is checking Bitcoin price chart on digital exchange on smartphone, cryptocurrency future price action prediction. cryptocurrency trading stock pictures, royalty-free photos & images

1. Use the right trading platform 

One of the ideal ways to secure your coins and tokens is to use a suitable trading and exchange platform. You should be cautious and cautious about the increasing number of fraudulent crypto trading platforms. Therefore, you should consider specific guidelines when selecting an ideal exchange and trading platform. Consider online reviews about the platforms, security measures to prevent hacking and spying, the history of cryptocurrency exchange and trading, diversification, etc. 

These factors will help you select a reliable platform, such as Finixio AI, where you can trade different coins and tokens without worrying about hacking or losing your coins. The platform also provides safe storage options, especially for amateurs who know cryptocurrency security measures. If you want to cash out or sell your assets, the platform will facilitate the process and guarantee security between the trading parties.  

Cryptocurrencies New york, USA - May 17, 2018: Different cryptocarrencies exchange to dollar rate on monitor display. Photography of monitor screen. cryptocurrency trading stock pictures, royalty-free photos & images

2. Diversify your crypto portfolio 

 Just like other investments, you should consider the option to diversify your cryptocurrency investment portfolio. The coins perform differently; hence the need to buy different types to ensure you reap the benefits any time there is growth in one coin. Speculations can easily affect the cryptocurrency value; hence the gain on a coin can arise from unexpected sources, such as a company integrating it as part of their payments or a large company investing in the coins.  

While diversifying your cryptocurrency portfolio, you should conduct enough research and consider top-performing options such as Bitcoin, Ethereum, Dogecoin, and Litecoin. Diversifying will also save you from feeling the impacts of speculations that may lead to the depreciation of a coin. You should also consider investing in other crypto assets such as NFTs, tokens, crypto-backed ventures, and businesses. 

Cryptocurrency on Binance trading app, Bitcoin BTC with altcoin digital coin crypto currency, BNB, Ethereum, Dogecoin, Cardano, defi p2p decentralized fintech market Bangkok, Thailand - 1 July 2021: Cryptocurrency on Binance trading app, Bitcoin BTC with altcoin digital coin crypto currency, BNB, Ethereum, Dogecoin, Cardano, defi p2p decentralized fintech market cryptocurrency trading stock pictures, royalty-free photos & images

3. Do enough research 

Before you purchase any coins or crypto assets, you should do extensive research to understand your option, investment considerations, and other market factors. You should consider the performance of one coin vs. the others, the vulnerabilities, history, and security measures, amongst other factors. Never make the mistake of purchasing something you do not know about. 

There are many places to gain the desired knowledge and cryptocurrencies. There are also a lot of misleading materials about cryptocurrency published on various platforms; hence you should obtain your content from reliable platforms.  

You can subscribe to the leading cryptocurrency investments podcasts, watch YouTube and read other online and website content. The research will help you make critical decisions on investing in coins, NFTs and tokens, and other factors.  

Business man stock exchange trader broker looking at pc computer screen, investor manager analyzing financial chart trading online investment data price crypto currency market graph, managing risks. Business man stock exchange trader broker looking at pc computer screen, investor manager analyzing financial chart trading online investment data price crypto currency market graph, managing risks. cryptocurrency trading stock pictures, royalty-free photos & images

4. Timing is key 

Cryptocurrency investments and purchases are like the stock market, where you need to be a risk taker while being cautious and timely about your investment decisions. The Fear of Missing Out (FOMO) can also affect your investment judgment. As a token begins performing well in the market, forces such as speculations tend to rally, further affecting growth. This can easily make unsuspecting investors fear missing out on the opportunity. The same forces tend to conspire to facilitate a token or coin's market value decline. 

Find a project with real potential for growth, even if the growth and invest in it. Avoid making decisions based on FOMO, speculations, and misleading data. You can gain in a short while but lose adversely in the future. In such cases, you can be a part of the wave but exit as soon as possible. When you enjoy the party longer, it can come crashing and tumbling on you, leading to unanticipated and unseen losses. 

5. Consider long-term investment  

Most articles you read online and videos on social media and YouTube inform people about cryptocurrency being a get-rich-quick investment. Most people trust the instant investment increment because they do not know about crypto investment and performance factors. Crypto millionaires and billionaires started investing long ago; hence you need to be patient because the market value will only increase gradually or rise exponentially.  

Many forces can affect the value of cryptocurrencies; hence, you need to know how they affect asset growth. Investing with a long-term mindset means diversifying, retaining some funds, and investing in relatively secure tokens or coins that show market growth but not a crazy rise in value promised by online content.  

6. The trading mindset 

You should not invest all your money thinking you will get rich quickly and return the expenses. The opposite can be the case, especially when there is panic across the markets. Do not be driven by emotions and intuitions to invest in the market; consider time and available information to make a wise cryptocurrency investment decision. However, be ready to take risks backed by sufficient data and watch out for opportunities to help you grow your portfolios. Take advantage of short-term opportunities such as speculations and asset value increases, but cash out quickly because such opportunities are short-lived.  

Conclusion 

Many consider cryptocurrency investment a get-rich-fast investment; however, that is not the case. You can make severe losses if you do not follow the purchase guidelines. Ensure you diversify your asset, do sufficient research about the crypto asset you want to buy, and only trade with reliable platforms. Be open-minded and future-oriented, and make timing a key concept to guide your trade, not fear or sentiments.  

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