With so many opportunities available to participate in crypto and blockchain technology, crypto markets seem to be the very place everyone must go. Whether you wish to buy a coin, sell a coin, participate in airdrops, provide liquidity, or do other crypto-related activities, you need to be in the crypto market first. It is an ecosystem where all crypto trading and transacting takes place.
The crypto market can make or mare you. Whether a new user or an experienced trader, the crypto market can consume your assets and make you want to cry. While everyone is at risk, new users are usually the most vulnerable. So it is important especially for new users to stay informed and at alert anytime they are interacting with other crypto users in the market. So in this presentation, I will explain some things that anyone participating in a crypto market need to beware of. But let me start by mentioning a few reasons why we need crypto markets.
Crypto markets - why so important
Crypto markets play a crucial role in the crypto space, being a platform where everything crypto happen. Consider the following 3 useful services that crypto markets provide:
- Trade cryptos: Crypto markets create the avenue for different participants in the ecosystem to meet and transact. For buyers, the crypto market is the place where they can see all the cryptocurrencies they wish to buy, their prices and the different sellers in the market. The crypto market to a place for buyer to purchase any coin of choice.
For sellers, the crypto market represents an avenue to display their merchandise and sell to buyers. Each crypto market provides the necessary tools a seller needs to advertise their cryptos and make sells. Some of those tools include a way to display coins or tokens for sale, collect payments from buyers and send tokens to buyers. So for buyers and sellers, they meet in the crypto market and each are able to fulfil their goal which is either to buy or sell crypto.
- Invest: Crypto markets are also avenues for investors to get involved, make some investments and hope to have ROI. Cryptocurrency markets offer many opportunities for investment such as buying tokens when the price is low, holding it, and selling when the market goes up. Other opportunities for investment includes trading of cryptocurrencies and making profits.
Crypto markets also allow investors to participate in staking. Through staking, investors lock up some of their assets and receive payments based on the staked amount. Apart from staking, investors can provide funds for liquidity pools and earn from transactions fees. These are avenues for investing in the crypto space.
- Discover DAPPs: Crypto markets also host decentralized applications which are used to provide various services to users in the ecosystem. Some DAPPs are used to design liquidity pools, staking, borrowing and lending, governance, etc. These DAPPs are crucial in the execution of various crypto projects. They are created and hosted in the crypto markets.
From the above, you will see some of the importance of crypto markets which make them invaluable in the development of cryptocurrencies and blockchain technology as a whole.
With these great value also comes risks which users new and old should be aware of concerning crypto markets. Consider the following
5 things to beware in crypto markets
A lot can go wrong in crypto markets which is why you need to take extra caution while dealing in there. So I have put together 6 things you should always keep in mind anytime you are transacting in a crypto market:
- Volatility of cryptos: One of the most important thing to keep in mind regarding crypto markets is that the prices of cryptocurrencies are always going up and down. We call it volatility. So you need to beware of this. So if you are placing trades, you want to make sure you are not buying when the price is extremely high. It might take few seconds for the price to crash. You could loose your investment to price volatility.
If you do not have any trading experience, it is better not to trade as a novice. Nothing is fixed in the crypto market. It is an ever-changing environment. So learn from the experts before you venture into it. And if you must invest in any project in the market, its better to start small.
- Security of assets: While cryptocurrencies have enhanced security features by design, it is left to you to secure your assets more. To begin, never release your private wallet keys to anyone even if they claim to be representatives of the platform. Make sure your keys are securely backed up so that you can recover your account in the event of any loss.
You can take advantage of enhanced security features of the platform to make your assets more secure. That may include have very strong passwords usually of alpha-numeric combination. You could also implement 2-factor authentication security to add an extra layer of security for your assets. This ensures that if your password is compromised, the added layer of protection will stop an intruder from accessing your account. Always change your passwords from time to time, It is best to have different passwords for different wallets.
- Size of portfolio: Its better to have a diversified portfolio. This is important given that crypto is volatile and your assets will either increase or reduce in value based on market conditions. If you make all your investment in one token or few, it will be difficult to recover from a bear market. But spreading out your investment over many different cryptos will ensure that not all of them will crash as the same time.
So basically do not put all your eggs in one basket. Invest and hold many cryptocurrencies. Not all of them will drop in price at the same time. This is sort of protection to your assets.
- Bad actors: Just beware of bad actors. They are just everywhere. So do not trust everything you hear, and do not listen to anyone. There are groups that will create fear, uncertainty and doubts FUD. There aim is to make you invest wrongly. There are many shit coins and scam projects in the crypto market. You do not want to buy every coin you see.
Phishing is another scam that is popular. They have fake apps and websites that looks just like the original. Always be sure that you are on the original platform. Before you enter your private keys, confirm that the URL is entered correctly and that you are on the correct platform. A little carelessness here could lead to loss of assets. Take not of the last point.
- Always DYOR: Yes always Do Your Own Research. Do not believe everyone advert or promotion. Avoid new coins and unknown 'influencers'. Do not invest hurriedly without first making thorough research about the coin and project.
Always get crypto news and updates from reliable sources. You crypto trading and investment decisions should be based on sound knowledge of the market, coin or project. Do not base fully on recommendations from other traders or users. If you understand what you are getting involved in very well, your mistakes if any, would be few.
Conclusion
The crypto market is a useful platform for all crypto users. It gives us a place to meet and do crypto businesses. However, the market is full of risks. When you stay alert and take steps to secure your assets, you wont make decisions that you will regret later.