Bitcoin and cryptocurrency have been budding since the time of their creation and it’s not going to stop anywhere in the coming time. So it is obvious to ask yourself these essential questions before washing your hands into the ocean of the cryptocurrency era.
Do You See the Bitcoin and the Cryptocurrency Industry as a Revolution?
The first thing you must ask yourself is what you think about Bitcoin and cryptocurrency. For some people, Bitcoin is nothing more than a new investment tool that offers the hope of huge returns on investment.
One might see Bitcoin as a great opportunity to build a fairer world for all in the future. Of course, this is only one point of view and you have the right to have a different opinion about bitcoin. The way you perceive Bitcoin and cryptocurrency, in general, will have a strong impact on how you will invest.
If you see Bitcoin as a revolution, you will probably be more inclined to support it in the long run by accumulating new Bitcoins regularly and keeping them warm without touching them.
If for you, cryptocurrency and Bitcoin are just new financial assets, you will not be in a long-term strategy.
will You Choose the Next Cryptocurrency You Invest In?
You may have noticed that there are many cryptocurrencies to invest in over 20,000 cryptocurrencies if you see popular market sites like CoinGabbar.At first glance, you may feel that it will be difficult to find your way around a large number of cryptocurrencies you could invest in.
Overall, only cryptocurrencies that address real-world user issues will have the ability to survive in the future. You should therefore only invest in cryptocurrencies that respond to real problems. This is an essential prerequisite.
DoYou Intend to Sell Your Cryptocurrencies As Soon as Their Price Has Reached aPeak?
First of all, one should ask oneself what one thinks about Bitcoin and the cryptocurrency industry. Your answer to this first question has already helped you determine whether you want to join in the long term or rather in the short/medium term.
Now, before buying a cryptocurrency, you need to define if you are ready to sell it when its price has reached a peak.
By answering this question in advance, you will have no hesitation if the time comes.
You will be able to make a quicker decision and maximize your profits.
what are the Factors That Could Cause You to Immediately Sell All the Tokens of cryptocurrency You Own?
Making winning investments requires excellent control of the risk inherent in any investment. To better control the risk, you will have to anticipate different scenarios to prepare for them as well as possible. You need to ask yourself what factors might cause you to immediately sell all the cryptocurrency tokens you own.
The factors can be multiple and you will determine them by studying the fundamentals of the project behind each cryptocurrency.
You can also identify factors that are external to the cryptocurrency industry but are specific to your personal.
For each of the factors you will identify, one should prepare a plan of action you will implement. This will allow you to react as quickly as possible by eliminating the loss of time inherent in any decision-making process. When it comes to investing, acting quickly when you learn crucial information about cryptocurrency can save you a lot of money.
So you need to be prepared.
WhatIs the Maximum Amount as a Percentage of Your Initial Investment That You are willing to Lose?
When it comes to financial investment, Warren Buffett knows a lot about it. His phenomenal success, which has lasted for more than 60 years, commands respect.
WhenWarren Buffett details these two golden rules of investing, all you have to do is listen. Here are Warren Buffett’s two basic investment rules:
“RuleNo.1: Never lose money. Rule No.2: Never forget rule No.1.”
— Warren Buffett
These two rules are really only one.
WhatWarren Buffett says is self-evident. Nevertheless, in some cases, you will lose money. Losing money by investing happens to everyone.
DoYou Follow Market News and Prices on a Daily Basis?
To conclude with these essential questions that you will need to ask yourself before investing in the cryptocurrency world, you need to decide whether you should rigorously follow market news and cryptocurrency prices on a daily basis or not.
If you do not wish to follow the news of cryptocurrencies on a daily basis, you should favor medium and long-term investments.
One should literally adopt a medium/long-term strategy in order to avoid having to look at cryptocurrency prices on a daily basis.
Some people prefer to do day trading with cryptocurrencies but it is very time-consuming and much riskier. Once you have gained experience with cryptocurrencies, you might want to consider it if you have the time to devote to and look up to the market.
Investment cryptocurrencies are very similar to investments in the traditional financial world. Before you make your first purchases of cryptocurrencies, you need to ask yourself the right questions.
These questions will help you to better understand your expectations.
You will know whether you want to support certain projects in which you particularly believe for the future or whether you see cryptocurrencies only as a financial investment.