Why Crypto Advice Is Beneficial For Beginner
Crypto advice can be beneficial for beginners because it can provide them with valuable information and guidance on how to navigate the complex and often volatile world of cryptocurrency. This can include information on the various types of cryptocurrencies available, how to buy and sell them, and how to store and protect them. Additionally, crypto advice can help beginners to understand the risks and potential rewards associated with investing in cryptocurrency, and can provide them with strategies for managing their investments. Overall, crypto advice can help beginners to make more informed decisions and to be more successful in their crypto investments.
Where Not to Go for Crypto Advice?
Over the last few years, cryptocurrency has become an increasingly popular option for investing. The crypto market is known for its volatility but has captured the attention of a large number of investors looking for new ways to seek profit in their portfolios. But amid such a new and unregulated financial market, investors are left looking for guidance on crypto matters such as how to choose a coin to buy or how to account for taxes on crypto trading proceeds.
Which Are the Worst Places to Seek Crypto Advice?
Family and Friends
Unless your family member or friend is a crypto advisor, accountant, or longtime crypto expert, taking advice from close friends and relatives can be costly. Banking on the experience of your close pals when handling financial matters might not be the best choice. Instead, you want to ensure that your financial decisions are wisely made out of careful consideration with an expert on the subject matter.
Online Communities
Different forums like Quora and Reddit can be good for getting different perspectives from people about a topic. When it comes to asking for financial advice, however, it’s not the best place to get counsel on smart money moves.
You can learn from the experiences of others, but trying to replicate someone’s success by making the same moves they made can prove to be your biggest mistake. Circumstances and conditions do change, and this affects outcomes. So, consult a certified crypto advisor who can guide you in making the right decisions on your crypto journey.
People Unknown to You
If you’re a non-fungible token (NFT) collector, creator, or crypto enthusiast, you should be familiar with the platforms used to host crypto communities. Incidences like a person unknown to you diving in to send you a message are commonly experienced across all social media platforms.
Such people can present a seemingly promising investment opportunity worth buying into. But beware of such propositions, as they’re mostly scams. As a security tip, if possible, you can adjust your platform settings not to allow any random unknown person to message you.
Where to Get Crypto Advice
Certified Crypto Advisors
A financial advisor is a broad term covering a range of financial professionals, including those who specialize in working with cryptocurrencies. Crypto financial advisors can help you create and manage an investment portfolio. They provide financial advice to crypto investors and crypto-based startups.
These experts should have a Certificate in Blockchain and Digital Assets (CBDA) or Certified Digital Asset Advisor (CDAA) credential.12 However, financial advisors such as Chartered Financial Consultants (ChFCs) or Certified Public Accountants (CPAs) with a deep knowledge of crypto also can be qualified to work with crypto investors.
Crypto Experts and Influencers
Many crypto experts have a wealth of knowledge in the blockchain industry, including blockchain developers, crypto influencers, thought leaders, and crypto investors.
Here are five people to follow to get sharp insights on cryptocurrency. They share information on innovations in different blockchains and highlight cryptocurrencies in which they’re heavily invested. Remember that they do not provide financial advice and that you must conduct your own research before making any investment decisions.
Vitalik Buterin
Vitalik Buterin is a Canadian programmer who co-founded the Ethereum blockchain and Bitcoin Magazine.34 Buterin is an active voice on social media, especially on Twitter, where he has gathered more than 4 million followers. He shares updates about Ethereum, relevant blockchain information, and personal insights on crypto topics. He also has a blog on which he writes on a wide range of topics, from crypto to productivity and lifestyle.
Roger Ver
Roger Ver is the chief executive officer (CEO) of Bitcoin.com and a popular crypto influencer on Twitter. Popularly known as “Bitcoin Jesus,” Ver is an early adopter of Bitcoin and a leader in the cryptocurrency industry. He tweets his views about Bitcoin and regulations related to crypto. He has since built an audience of more than 750,000 on Twitter.
Andreas M. Antonopoulos
Andreas M. Antonopoulos is a Bitcoin advocate, tech entrepreneur, author, and popular podcaster. He hosts the “Speaking of Bitcoin” podcast, on which he discusses how Bitcoin and cryptocurrency, in general, are being adopted globally. He has a blockchain education platform and tweets on topics relating to crypto to more than 746,000 followers.
Ivan on Tech
Ivan Liljegvist, the founder of Moralis Web 3 Academy, is a popular crypto developer, entrepreneur, and influencer. He shares insights on the future of crypto and aims to empower others through Web 3—the name for the decentralized, blockchain-based web. He has a Twitter account and YouTube channel where he shares insights and news about Web 3 and crypto.
Elizabeth Stark
Elizabeth Stark is the co-founder and CEO of Lightning Labs, a company that developed the Lightning Network, which provides more user-friendly features for the Bitcoin blockchain. She’s a blockchain entrepreneur and a big Bitcoin advocate. She shares tweets on bitcoin’s use as a peer-to-peer exchange coin and several other crypto topics.
Educational Platforms
If you’re new to cryptocurrency, you’ll benefit from the learning resources that many educational platforms offer. You can explore different topics to help you understand how crypto works and how to get started investing in it. Here are three reliable educational platforms to learn crypto.
Binance is a cryptocurrency exchange offering a platform for users to buy and sell crypto coins. The platform also offers educational content on blockchain, cryptocurrencies, security, and NFTs through its academy. You’ll find how-to guides, trading tutorials, a comprehensive glossary, and various articles.5
Coinbase Learn comes from one of the most-used crypto exchanges globally. In addition to providing financial services for crypto transactions, Coinbase offers educational content to help educate crypto users on how to navigate the crypto space. You’ll find beginner’s guides, tutorials, and market updates on this site.6
Investopedia (this financial content producer) has extensive cryptocurrency coverage, including expert reviews of popular crypto coins and exchanges. You’ll find content such as beginner guides, a comprehensive collection of terms used in crypto, and news on the latest in the crypto market, among other financial news, definitions, and articles.
Coinbase Learn comes from one of the most-used crypto exchanges globally. In addition to providing financial services for crypto transactions, Coinbase offers educational content to help educate crypto users on how to navigate the crypto space. You’ll find beginner’s guides, tutorials, and market updates on this site.6
Investopedia (this financial content producer) has extensive cryptocurrency coverage, including expert reviews of popular crypto coins and exchanges. You’ll find content such as beginner guides, a comprehensive collection of terms used in crypto, and news on the latest in the crypto market, among other financial news, definitions, and articles.
Six cryptocurrency tips (and five mistakes to avoid)
If you want to invest in cryptocurrencies, here are six tips:
1. Have a strategy for crypto trading
It isn’t easy to separate genuine cryptocurrency recommendations from the scams; there are lots of sharks out there waiting to take your money.
Reports of crypto investment scams surged to 7,118 in the first nine months of 2021. This was up 30% on the whole of 2020, according to Action Fraud, with the average loss per victim at £20,500.
So when you’re confronted with a lot of information about a cryptocurrency, take a step back from the hype.
Try to look critically at the project or platform. How many users does it have? What problem does it solve? Avoid coins that promise the Earth but haven’t delivered anything tangible.
2. Manage risk
Some people offering crypto trading tips might not have your best interests at heart. So don’t get stung making the same mistakes as others.
Set limits on how much you invest in a particular digital currency and don’t be tempted to trade with more money than you can afford to lose.
Cryptocurrency trading is a high-risk business and more traders lose money than don’t.
We explain the highs and lows of the digital currency.
3. Diversify your crypto portfolio
It doesn’t pay to have too much invested in one single cryptocurrency. Or as they say: don’t put all your eggs in one basket.
As with stocks and shares, spread your money out among different digital currencies.
This means you don’t risk being over-exposed should one of them plummet in value – especially as the market prices of these investments are highly volatile.
There are thousands to choose from, so do your research. Examples include worldcoin and safemoon.
Find out about the alternatives to bitcoin.
4. Be in it for the long term
Prices can rise and fall quite dramatically day to day, and novice traders are often duped into panic selling when prices are low.
Cryptocurrencies are not going to go away. Leaving your money in the crypto market for months or years at a time could offer you the best rewards.
5. Automate purchases
Just as with regular stocks and shares, it can help to automate your crypto purchases to take advantage of pound-cost averaging.
Most cryptocurrency exchanges, including Coinbase and Gemini, allow you to set up recurring buys.
This is where crypto investors tell the platform to purchase a fixed amount of their preferred cryptocurrency every month – for example, £100 worth of bitcoin. It means they get a bit less of the currency when prices are high, and a little more when prices are low.
That takes the stress out of trying to time the market by either buying a currency at what you think is the lowest possible price or selling at the highest price. It’s something that even market professionals struggle to get right.
6. Use trading bots
Trading bots can be useful in some circumstances, but they aren’t recommended for beginners looking for crypto investment tips. Often, they are just scams in disguise.
If real algorithm existed that timed your buy and sell trades to perfection, everyone would be using them!
Five common crypto mistakes
The latest research from UK regulator the Financial Conduct Authority showed that about 2.3m Brits own cryptocurrency in one form or another.
It’s very easy to get caught up in the hype of news headlines. Crypto mistakes are startlingly common, and below we list some of them.
1. Buying just because the price is low
Low prices do not always represent bargains. Sometimes prices are low for a reason! Watch out for cryptocurrencies with falling user rates.
Often, too, developers leave a project and it stops getting properly updated, making the cryptocurrency insecure.
2. Going ‘all-in’
Some of the more suspect trading platforms suggest you should maximise your money by betting as much as possible. This is a quick way to the poor house.
Better crypto investment tips would be to only use a certain proportion of your investing capital — say 5% — and always keep an emergency cash fund in an easy access savings account that never gets invested in the market.
3. Thinking crypto is ‘easy money’
There’s nothing easy about making money through trading any kind of financial asset, whether stocks and shares or commodities like silver and gold. The same can be said for cryptocurrency.
Anyone who says different is probably trying to trick you into making crypto mistakes.
4. Forgetting your crypto keyphrase
If you have a hardware wallet for storing your crypto offline, forgetting your keyphrase is like losing the keys to a bank vault.
Without your keyphrase, all your cryptos will be irretrievable.
5. Falling for scams
Be very wary of crypto deals that sound too good to be true. We outline four common crypto scams you could be careful of:
Cloud multiplier scams
Fraudsters sometimes contact victims by email or text with an “investment opportunity”. They promise to give investors double or triple the amount they have put into bitcoin if they send their cryptocurrency to a particular digital wallet.
REMEMBER: Offers of free money should always be viewed with great scepticism
Pump and dump
Criminals can easily inflate or deflate the price of very small or unknown cryptocurrencies, sometimes sending the value of these currencies skyrocketing.
Sometimes criminals will own a lot of a particular cryptocurrency (through pre-mining much of it before it is available to the general public).
When unwitting traders rush in to try and grab a piece of the action, the criminals wait for the price to increase before selling all their coins and causing the price to crash.
They can pump up the price by promoting it on social media, before selling it at the higher price.
Malicious wallet software
The best crypto tips will tell you to stick with big name crypto wallets, such as Ledger, Trezor, Exodus or MetaMask.
Dodgy or unknown wallets that you find on Google Play or the App Store can steal your crypto funds with dodgy code.
Fake coins
With so many cryptocurrencies on the market, it can be difficult to tell what’s real and what’s not.
When you invest in fake coins, criminals can steal your identity and often your hard-earned money.
Don’t take anyone else’s word for it and use as many sources as possible to do your own research on coins before you buy them.
Know your crypto lingo
There is a lot of jargon out there in crypto land and often it can be difficult to decipher.
Use this helpful list to make the most of the best crypto tips and dodge common cryptocurrency mistakes that could blow up your trading account.
- Altcoin: a portmanteau of “alternative” and “coin”, altcoin refers to any cryptocurrency other than the original one, bitcoin.
- Cryptocurrency exchanges: just like regular stock exchanges, the likes of Coinbase, Binance, Gemini and Bitstamp allow traders and investors to buy and sell — except that here they are trading cryptocurrencies. Unlike standard stock markets, cryptocurrency exchanges are online-only and are open 24 hours a day, seven days a week.
- Limits: most exchanges do not set limits or restrictions on the number of cryptocurrency trades their users can make in a day. On turbulent trading days, when cryptocurrency prices are moving up or down very quickly, some brokers may put a short-term halt on people depositing funds on their platforms.
- Market cap: the total value of a cryptocurrency. It’s calculated by multiplying the price of a cryptocurrency by the total number of its coins in circulation. It’s a useful measure for comparing the total value or size of different cryptocurrencies.
- Shorting: “shorting” cryptocurrency means betting on the price going down rather than up.
- Forks: a cryptocurrency fork is a split in a blockchain where two separate blockchains are created. This is sometimes because of a disagreement between developers as to how the blockchain should be organised. In 2017, bitcoin forked into two separate blockchains: bitcoin and bitcoin cash.
- ICO: this is an initial coin offering where new cryptos are sold to investors for the first time. It’s similar to an initial public offering (IPO) in the stocks and shares world.
- Margin trading: when platforms talk about margin trading, they mean investors borrow money to increase their bet on a cryptocurrency. Be very careful, though, because margin trading can dramatically exacerbate losses if a trade doesn’t go your way.
- Fiat: a fiat currency is one that is backed by a sovereign government. For instance, sterling, US dollars or Indian rupees.
- Cloud mining: people can “mine”, or create, cryptocurrencies to compete for rewards in the form of newly minted crypto. Cloud mining uses remote data centres with shared processing power, like the kind that powers Google software, to pool resources and cut the cost of mining.
- Be extremely wary, as many cloud mining companies are just scams. An incredible amount of computing power is needed to mine the top cryptocurrencies. Anyone offering easy cloud-mining rewards is likely to be a charlatan.
- Bull markets and bear markets: these are phrases borrowed from traditional stock markets. A bull market means traders are confident in the prospects for a particular investment, meaning they will keep buying and prices will keep rising – whereas in a bear market, traders are nervous and prices will generally fall.
- Sell orders: a sell order is an instruction given by traders to a platform to sell cryptocurrency that they own when the price hits a certain level. In traditional markets, this is referred to as a “stop loss”.
Important tips for beginners
Educate yourself
You must understand what you are getting into to make a profit from investing in crypto. Bitcoin, the biggest cryptocurrency by market capitalisation, is powered by blockchain technology. Blockchain is the underlying technology here that has real-world utilities.
A study suggests that as many as 58 big industries could adopt blockchain in the future to transform their operations. Study about the underlying technologies having real-world use-cases to find profitable investments.
Prepare for extreme volatility
One factor that sets the crypto market apart from all the other markets is extreme volatility. Crypto is a ‘high-risk, high-reward market because of the frequent fluctuations. The value of Bitcoin dropped nearly 30 percent in a day in May 2021.
Expect exponential pumps and dumps in the prices of various cryptocurrencies. Matic (earlier Polygon) provided 4,300 percent returns to investors last year. Some other cryptocurrencies surged as much as 50,000 percent in just one year.
As an investor, you must be ready for both pumps and dumps. Avoid getting perplexed with the fluctuations and focus on cryptos with strong fundamentals.
