Investing in crypto seems very exciting, but here is what I wished I knew when I was getting started with crypto investment.
Cryptocurrencies are known for wild price swings, though we have stable ones like DAI from Maker DAO and USDT backed by the United States dollar, which stays close to the value of one USD.
Apart from the stable coins, cryptocurrencies are extremely volatile. This makes risk much higher in crypto markets. And because of this, it is crucial to know your tolerance for risk before investing in cryptocurrencies.
Knowing your risk tolerance will also help you decide the amount you put into crypto in the first place.
How I started
When I got into crypto back in 2019, I only had one thing in mind. Crypto investments are the fastest way to become rich, and it could make you too filthy rich, maybe in the next month, next year, or the next two years.
This assumption was not wrong, but it came from me, the wrong person, me.
I never had a tangible job by then, and my earnings were not something to write home about. This put me in a tight position. Because I wanted to invest in Crypto, and for all I know, my investment might make me rich sooner than later.
I Nearly Lost It All
I considered doing many things like selling my laptop to invest and even scavenging my savings.
Well, you can think that maybe it was a good idea in 2019 because of how the market turned out two years later.
But let’s look closely into it. Shortly after having these crazy thoughts about going all in. I remembered that my laptop was the only source of my income. And losing it for just a month will be too dangerous.
On the other hand, my savings was a backup source for food and my other basic needs.
This also means by using all my savings to buy crypto, I would be putting myself at risk if my movie-selling business doesn’t bring in any money for a day, which was very likely.
In my case, it was just a laptop and very little savings.
Crypto can be risky
But to some people who have more valuable possessions. It could be even more dangerous to sell them to invest in Crypto, considering the risk. Any amount you put in crypto may be lost completely. In fact, this has happened to some people. We can see an example from the Squid game coin. The Squid token crashed from $2,861 to $0 in just a matter of hours in 2021. I did not bring that up to scare you away from crypto investment, but to give you some hints that there is a possibility that things can go horribly wrong.
The crypto market has a lot of potential. But it is important to always remember that it is a new technology. It is possible to lose all that you invest, so be cautious. Before putting in your money in any project, ask yourself some questions, and always invest what you are willing to lose.
Avoid selling all your valuable possessions to invest in the market, and always research a project before investing.
It is also good to have the right information and seek education to understand better what you are doing.
We have one of the best resources for you here on Life with Crypto with tons of courses that will give you the right knowledge of cryptocurrencies.
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