Are you new to Cryptocurreny? Perhaps you aren't so new, but feel as though you're missing out on all these amazing opportunities and are sick of hearing about how everyone else got rich and you didn't.
Here are the 5 Commandments of Cryptocurrency. They could very well make you happier than most in the space and save you a lot of losses and anxiety along the way.
So without further delay, let's get straight into them.
1 - Thou shalt not get too greedy.
Often called FOMO (fear of missing out) people sell their recently acquired stocks at a loss to buy 'the next big thing' and find that also loses. It is often said that your portfolio is like a bar of soap. The more you handle it, the smaller it gets.
There is so much speculation in cryptocurrency and there’s a reason for that. Its unregulated, such a small market (around 100 billion) and its therefore commentated on by, well, any Tom, Dick and Harry. You will continually read that a coin is about to moon (meaning rocket in price) due to a big release. If you feel you must get involved, then buy the rumour and sell the news. This means, buy the coin before the actual news becomes official and sell just before the news comes out. The hype surrounding the price rise is almost always a huge let down and deflating to the market value once released.
If however you actually believe in the company or coin you have invested in then hold and don’t sell.
Also Google the reddit post for HODL and you’ll understand why everyone in crypto circles spells “hold” incorrectly!
2 - Thou shalt only purchase things that exist.
Too many people get sucked in by a fancy marketing pitch or a charismatic speaker, on the promise of great things to come. However, in this space, a lot of promises remain just that and never eventuate. Someone will come along with a faster and better idea that actually works, rendering what you have bought useless and more importantly, worthless.
That's not to say that some ICOs that are yet to have a product aren't worth a gamble, but you need to realise that it is indeed a gamble. If you can't afford to lose it, then don't invest it. Best stick to a company that has a working product or one that is at least in beta testing stages. We will write articles to help you navigate these tricky waters soon.
3 - Thou shalt recognise that supply equals demand.
Yes, its basic economics. Yes, we have all heard it a million times before. So why then are some of the most plentiful tokens on the market worth so much? That won't last, as has been proven time and time again.
A simple click on 'circulating supply' in the coinmarketcap.com top 100 shows you which are in way too abundant supply. Yes, they are in the top 100 and yes, they are popular, but that doesn't necessarily make them a good buy. Do your research and run your numbers.
4 - Thou shalt buy solutions to problems
Does the token or coin you are looking at buying solve a real world problem that needs solving? Forget all the gimmick coins, there are hundreds of those just waiting to disappear. You need to say, if I am going to hold these coins, then they need to work, solve a problem that needs solving and be focused on long term plans.
Bitcoin solved a problem. Are there faster versions now that are also built on better technology? Yes. So why is it worth the most? It a) has the first player advantage and b) has a limited supply that makes it valuable. Not to mention it is becoming more widely accepted as a legitimate currency each and every day, all around the world.
Better to choose 5 or so coins you like, that work and then hold. Set it and forget it and in a few years you too could be very happy.
5 - Thou shalt remember the lessons learned from previous industry booms.
Look no further than the dot com boom. Many were overnight millionaires. Many rags to riches stories filled the mainstream media headlines. Then it burst and most people lost more than they gained. Why? Simple. Every industry experiences wealth to early investors, especially if they chose correctly.
One thing to remember though, is that the bubble bursting often comes long before the mainstream adoption of the movement. If you are lucky enough to be on one of the few players who stand the test of time, then you end up laughing all the way to the bank. Think Ebay, Amazon and Google. A few dollars in those companies in the beginning, coupled with a lot of faith and patience would have netted you a tidy sum of money. However, most of the companies that dominated the mainstream media headlines often failed, leaving the investors red faced and eating beans.
We hope you have liked this article. Stay tuned for more crypto news and information. We will soon release a list of 5 coins you have to invest in, based on the commandments written above. Don't miss your chance to find out what they are and why.
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