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Rookie Mistakes When Starting Out in Crypto

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2022-08-04
Rookie Mistakes When Starting Out in Crypto

Everyone makes mistakes, it is completely human. Cryptocurrency is a very error-prone market because there is a lot of volatility, the market can go up 60% but can also go down 60%. As cryptocurrency is 24/7 and well it is more likely to make mistakes in this market, this article aims to help you avoid these mistakes.

Getting into cryptocurrency without educating yourself

Before really diving in, it’s important to learn about the volatility of the industry and familiarize yourself with the way the financial markets work.

There are times, such as price peaks (the highest prices), when it is not advisable to jump in head first. These are often the times when everyone is talking about cryptocurrencies because we are in a bull-run, but tell yourself one thing: if the price is one that a cryptocurrency has never seen before (t op price of all time), you want to sell, not buy. Do not wait for prices to fall to educate yourself and learn that there are 4 year cycles for Bitcoin for example. This cycle is correlated to halving.

Do not invest in a cryptocurrency without educating yourself on the project you are investing in and without educating yourself on cryptomoney in general. If you want to get into cryptocurrency fast and efficiently, read our Bitget Academy articles (we cover all things around the topics of Blockchain, Crypto, Trading, NFTs, Web3), read more books or watch YouTube videos. Accumulating cryptocurrencies is one thing, but the most important thing is to accumulate knowledge about cryptocurrencies in order to invest in solid projects and make gains.

Investing under the influence of emotion

Yes, the cryptocurrency market never stops and sometimes we sleep very little at night because even at night the market goes down, crashes or soars and we may have trouble sleeping. That is when we make the worst emotional decisions and when we are most tired we are most receptive to emotions. We say to ourselves: "well, I'm going to invest in such and such a cryptocurrency... I believe in such and such a project..." but in reality, we simply mismanage our portfolio because we invest on emotion. So that is one of the worst mistakes, it is like if one of your friends says: "here, invest in this cryptocurrency" and you take direct action. So it is not a fault to take action very quickly but every time it happens to you think of Roger Federer who always gives himself 24 hours before making a big decision in his life. And so tell yourself that every decision you make in your life, give yourself time to make it. When you want to invest in a cryptocurrency, give yourself at least some time before you take action. This helps to avoid acting on emotion.

Investing in a cryptocurrency that's making the buzz

We can tell you that the cryptocurrencies that are making the buzz there are plenty, really plenty. So from the moment a friend sends you a message saying "look at this crypto there is a great project, look it has taken 80%" and well this is when you should not FOMO (Fear Of Missing Out). When we see a currency making a parabolic curve, we say to ourselves "well, I'm going to get on the train" but the problem is that it's often too late because the correction is very often in the process of happening. The more you get involved in the crypto community, the more messages like this you are going to get "well, do you know such and such a token?". Consider that the moment someone asks you the question and that crypto has already performed, that crypto has exploded and well that is a trap you do not want to fall into.

When you hear a buzz about a cryptocurrency, it is likely that :

1 - It is a scam

2 - It is probably already too late

It is often when no one is talking about this cryptocurrency and when you think "well, this crypto is going to have crazy potential" and well that's certainly the time to invest. You should try to invest as little as possible in the green and as much as possible in the red. In the red, there is never anyone, it's radio silence, people are demoralized but that's when we recommend you buy and strengthen your positions.

Trading

By trading without mastering it you can lose thousands of dollars. When we say trader, of course we are aware that there are different types of trading. Buying and selling is much more reasonable than using leverage x2, x3, x10, x20... In short, placing orders for very short periods of time. Many beginners in cryptocurrencies have lost considerable amounts of money often due to lack of education, lack of practice, lack of experience but also due to the nature of the market which is very volatile. As long as the market is very volatile both up and down, well, it is not optimal for trading when you are just starting out. The market makes very violent waves and the changes are radical so the curves can fall by -10, -30% and then rise by +30 or 40%. This is even more the case when cryptocurrencies reach a record high price. Due to lack of experience, lack of skills and under the influence of emotion, this cocktail should be avoided at all costs. A technique to remedy this, which is very annoying but effective, is to HODL, that is to say to buy cryptocurrency and to keep it on the medium, long term or even very long term. Because in the end, trying to anticipate the market and trying to sell at the highest and buy at the lowest is not the right strategy when you are starting out. Maybe you think you can do it, but it is very rarely the case. So ultimately HODLing and holding your cryptocurrency and reselling it via longer time intervals and well this is very often the best strategy for beginners.

Not anticipating and securing your investments

Lack of anticipation

What does this mean? Quite simply, it means securing your accounts and wallets.

Because yes, when you create an account on Bitget, you have a password, but you need to secure it with a double authenticator (2FA). Because if you put a very basic password, well, there is a good chance that you will be hacked. Beyond that, it is advisable to anticipate the loss of your cell phone. If you lose your phone, well, you lose all your data and therefore all your cryptocurrencies. Cryptocurrency is good because it is decentralized but if you lose your phone and/or if it is stolen, you will not have a banker because there is no banker and the only banker is you. If you have not secured your wallet, your phone and your different accounts, you have only yourself to blame. Often on a Ledger type wallet or if you go to a TrustWallet, or if you create an account on Metamask, well they give you recovery phrases just in case. Write them down carefully on a piece of paper and put them in a safe, at the bank, but do not take pictures of these phrases because it is the best way to get hacked. Secure these phrases and write them down carefully on a piece of paper. You can also spread these sentences in different places. If you have written down these words on a piece of paper and your house burns down, what do you do? Anticipation is power. Always be ready when it happens.

Wrong transaction input: wrong smart contract, wrong receiving wallet address, wrong blockchain, wrong memo.

If you make a mistake when transferring your funds, there is no way to reverse or recover your funds. So, remember to check all the information when you create a wallet, when you want to issue a transaction, etc. One of the most common mistakes is selecting the wrong network. Check which network you can receive your cryptocurrencies on because it is possible that your sending platform or wallet offers you several options. If the sending option is not the same as the arriving option, then you will lose access to your funds. Check all the information of your transactions carefully.

To help you get through the crypto transaction steps smoothly, below are the detailed instructions and tips on how to deposit assets into your Bitget wallet from another cryptocurrency wallet.

Tips:

– There are no fees for crypto deposits on Bitget

– Choose the right protocol (ERC20, TRC20, BEP2, BEP20, etc.) on the platform from which you are withdrawing your crypto. The protocol should be valid for your Bitget wallet address. Care should be taken as selecting the wrong protocol may result in losing your assets.

– Check the transaction details carefully before you hit ‘Submit’: the asset’s name, the recipient’s wallet address, the chain name, the amount.

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Rookie Mistakes When Starting Out in Crypto image 1

We hope this article can give you some guidance to get ahead in the world of cryptocurrency!

We’re also giving more trading tips and insights at Bitget Academy, so do follow us!

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