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Top Crypto Investment Regrets -Breaking

by Mike Robinson

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The Top 5 Crypto Investment Mistakes

If you know how to use cryptocurrencies, they can prove to be an incredible resource. Not all investors have the required technical or financial knowledge. There are plenty of investors who want to participate in the market, despite this.

However, there are things that you need to be careful of. These are five of the most common mistakes investors make when investing in crypto.

1. Sell Prematurely

Investments often fail to keep their eyes on the long term. They are mainly driven by psychology. Irrational behavior can occur when investors are cold-blooded. It is important to be detached and rational in your decision-making.

Many investors have shared their regrets of selling as soon as their crypto starts showing gains, quickly cashing in profits out of fear that all price growth will vanish and their asset’s value will hit rock bottom.

Many people will sell assets when the price drops. Although the golden rule of investment says to “buy low, sell high”, the impulse to sell assets when they undergo a drastic decline is strong indeed and, unfortunately, leads to losses.

It is a fact that markets tend to change and grow with time. There are highs followed by higher lows. Thinking long-term, holding onto assets or employing the ‘Dollar-Cost Averaging’ strategy can help to calm emotions, avoid expensive mistakes, and even see you end up with the profits one day.

2. Blindly Trusting an Influencer

Experts believe that many people feel encouraged by social media to invest in digital currency.

Numerous celebrities and public figures endorse digital assets. They make a profit by encouraging those with limited or no investment knowledge to invest in crypto.

Sometimes blindly trusting these people can lead to tragedy. This was evident in the following message:

Influencers might have different motives to talk about assets. You could be paying them to help promote an investment project. Or they might simply have a lack of the necessary expertise to provide advice on investing, even though their claims are based on non-credible and unverified sources.

Avoid falling for the temptation to believe in the wrong influencer. It is better not to trust influencers that promise high returns or exaggerate marketing offers or promote crypto projects.

As with any investment case, it’s important to do thorough research and be objective before you commit your capital.

3. Overdiversification

Everyone with a financial background always advises traders not to keep “all your eggs in one basket” and to diversify investments. Intelligent investing is possible only if you do this, they advise.

Diversified portfolios are assets that have been spread over different markets and sectors. This increases the risk-adjusted return in long-term, as well as protecting against volatility.

As long as you avoid going too far and trying to diversify excessively, that is. Over-diversification, or buying an overabundance of coins, or tokens, can increase risk, transaction costs, and other fees that will lead to a lower final returns in the end.

“Should be possible with 5-10 investments. No need to overcomplicate it”, advise those successful in crypto.

4. Avoid investing more than you are able to afford

Many people have tragic stories about investing in crypto assets and then seeing them disappear within minutes. Or, they fall prey to a rug pulling scam.

Putting one’s entire savings into digital coins in the hope of a better financial future is gambling, and should always be considered such. The digital currency is highly volatile. An investment’s value can fluctuate, and you might get less back than what you originally invested or lose everything.

It is important to remember that you should never risk more than what your finances can bear. Tradesmen and experienced investors never go all-in on a market, particularly if there is no investment plan.

Setting goals and rules for risk management creates discipline. Discipline helps you avoid making quick decisions, manage your trades, and ultimately, increases your investment return.

5. Transfer Mistakes

Almost a third of all mined Bitcoins are locked in wallets that can’t be accessed. Only God can know exactly how much of the world’s cryptocurrencies have been lost forever, simply because they were carelessly transferred to the wrong address, or worse, nowhere at all.

Contrary to fiat currency transactions, cryptocurrency transactions are irreversible. This means that it’s impossible for the recipient to recover them after they have been completed. If even the slightest spelling mistake occurs while filling in the recipient’s wallet address, the transaction will still take place, but the funds will be lost.

There is no way to cancel or reverse a transaction and recover lost funds, barring that they were deposited into another user’s wallet, and that person is kind enough to agree to return the money.

Crypto traders often lose money due to typos and also transfer of tokens to an incorrect network.

Different blockchains host different tokens. Every chain has its own wallet address. This is why it’s common for cryptocurrencies to be transferred from one chain to another (e.g. Transfers to Ethereum from one chain are made to another (e.g. Binance Smartchain) does not allow you to access the coins and wallets of the original blockchain.

Even the most experienced user can make an error, which is quite common. It is important for crypto investors to double check the sending and received blockchains before executing transactions.

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