What draws people’s attention to Bitcoin is that it could be a diversifying vehicle in portfolios and also a hedge against inflation. However, investing in Bitcoin is not for the faint of heart. The vast majority of investors who get lured in by stories of overnight fortunes plunge into the market unprepared. It can end up causing a long list of wrongs, from failing to pay attention to security to making some rash decisions based on market hype.

Anyone who’s interested in success in navigating Bitcoin’s dynamic market must understand the common mistakes made by Bitcoin investors. In this article, we will tackle key pitfalls to avoid while making strategic decisions by offering some tips. Investors can learn from the errors of others and be able to mitigate risks and maximize the potential of Bitcoin as an investment.

Lack of Research and Understanding

A common mistake when investing in Bitcoin is investing without doing your research, which could result in significant financial loss. While there is much to learn about the complexity and ever-changing nature of the crypto market, investors need to understand the fundamentals of Bitcoin and the overall crypto ecosystem first. In other words, you need to familiarize yourself with the basics and the simple things about Bitcoin.

The first thing is to learn how to purchase Bitcoin and where to trade it or store it. One helpful guide on that subject can be found on Webopedia, especially if you are new to crypto. Furthermore, by learning more information, you can understand its underlying technology, what is blockchain, and all the things surrounding crypto. Bitcoin is built on blockchain technology, which is a decentralized and transparent ledger that records all transactions. Investment in this technology may be lost due to a lack of understanding about how it works. To illustrate, investors who do not understand the implications of network security, scalability issues, or a lack of forks may be completely caught off guard by market movements. Furthermore, without this, it is difficult to tell between promising projects and potential scams.

At one point, you will reach a new level, where you will play the trading game – constantly reading and gathering information to stay on top of market trends, regulatory changes, and any potential risks with any crypto on your portfolio. Responsible trading practices are crucial for minimizing risk. It encompasses everything from learning the technology and the market environment well enough, setting reasonable expectations, and creating a comprehensive investment strategy. Educating yourself is the best way for investors to stay up to date and make sound decisions, avoid market hype, and manage their portfolios in the volatile crypto environment.

Emotional Decision-Making

The problem of emotional decision-making in Bitcoin investing is common: emotions like fear and greed can weigh heavily on someone’s investment decisions. Unfortunately, the emotions associated with the volatility of the cryptocurrency market can make decisions that do not fit with long-term financial goals even more common.

For instance, fear makes us immediately panic sell when the market moves down. If Bitcoin is experiencing a sudden price drop, some inexperienced investors will try to sell their holdings in fear of losing more. It can crystallize the losses of such companies, curdling the possibility of potential market recoveries. However, greed could also force investors to buy into a rally without giving thought to fundamental value or potential risk and end with overinvestment and exposure to large meltdowns.

Investors must avoid becoming upset and try to go by a data-driven approach in their investment strategy to avoid these pitfalls. That means we must conduct market research, understand what is going on in the markets, and understand the factors that influence prices and how this translates into decisions, rather than making them based on emotion. Investors can learn to stay informed and remain grounded to better navigate the market volatility and make market strategy choices that are in line with their long-term goals.

Ignoring Security Measures

First and foremost, any Bitcoin investor is concerned with securing digital assets from being stolen or hacked. Crypto being a decentralized space, the chances of recovery are close to none if you lose your crypto, which is why security is such an important thing. Hardware wallets are one critical practice that store cryptocurrencies offline and away from online threats to give the highest level of security compared to software wallets. On top of this, two-factor authentication (2FA) also comes in handy, which involves having another way to prove who you are besides just your password. These are security practices that will help secure assets from unwanted access and cyberattack. Investors can protect their investments from the increasing risk of crypto theft through security.

Timing the Market

Buying low and selling high with Bitcoin when trying to time the market is a risky endeavor. The cryptocurrency market is notorious for its instability and unpredictability, and it’s incredibly difficult to accurately predict price moves. If investors seize on the market’s unexpected rallies, they may miss out on potentially huge gains if they stay on the sidelines. On the other hand, if you enter the market when perceived lows persist, you will lose a lot of money if prices keep on falling. A better alternative is to invest without trying to time the market—thinking long-term and spreading your money around.

Failing to Diversify

Investing all in Bitcoin is by no means a secure thing to do given the cryptocurrency’s high volatility and market unpredictability. What makes Bitcoin prices so volatile is the fact that they can swing greatly over very short periods, meaning that anyone completely exposed to its swings can incur huge financial losses. While investing solely in Bitcoin, you risk missing out on other asset classes with more stable and diverse returns.

Diversification is vital to pulling these risks down. By blending investments among different assets, or asset classes, such as stocks, bonds, other cryptocurrencies, and even commodities, investors can lower the total risk of their portfolio. Diversification helps to even out market swings by taking some of the heat out of exposure to a particular asset when it declines and mitigating some of the impact of a gain in a different asset.

Overlooking Fees and Costs

When it comes to investing in Bitcoin, there are costs and transaction fees that you can easily overlook that can seriously affect how profitable your investment will actually be. Investors pay fees at different stages when buying or trading Bitcoin: while depositing and withdrawing and when exchanging on exchanges. The fees, however, can vary from platform to platform and will be a percentage of the transaction or a flat rate. One simple example: whereas a 1% trading fee may not seem like a lot, if you do 10 transactions, the amount you pay is 10% of your purchases or sales—which could be significant over time.

Furthermore, the network transaction fees to transfer Bitcoin from one wallet to another can fluctuate due to network congestion. Cumulative fees take away from overall profits, especially when the size of your investment is small or for frequent traders. The key to maximizing net gains is to be aware of these costs and to pick platforms that have lower fees.

Lack of a Clear Exit Strategy

There is nothing more important than having a clear exit strategy when you are getting into Bitcoin investing because it will help you decide when and how to sell your positions to achieve your financial goals. When the criteria for exiting are based on specific price targets, time frames, or market conditions, investors’ ability to make emotional decisions decreases. Investors tend to hold assets for too long, only to sell them and lose the opportunity for maximum profit at the right time on the market if they do not have a clear plan.

Another pitfall is that panic selling during downturns can also occur out of a lack of strategy, and you can end up locking in losses because you have to ride out the dips. Investors can set up predefined exit plans that protect gains, manage risk, and guarantee that action takes place in line with long-term financial goals.

Falling for Scams

The crypto industry is filled with scammy things, like Ponzi schemes and phishing. Ponzi schemes work by paying early investors with participant money to recruit more investors, which eventually collapses because they can’t recruit new investors as quickly. Phishing attacks are fake websites or emails that masquerade as legitimate services to trick people into revealing private keys or login information.

Do be skeptical of promises that seem too good to be true with little risk and are trying to pay you big bucks fast. Be thorough and research any platform or opportunity before you invest, and check credibility with a credible source. Do not go through links in emails or messages; go to official websites directly. Further, allow security, such as two-factor authentication, and never disclose sensitive information. It is imperative you stay informed and stay cautious.

And we conclude that investing in Bitcoin has a great potential for rewards, but there are a lot of challenges and risks. Big pitfalls include no research, no understanding, emotional decision-making, forgetting about security, trying to time the market, not diversifying, not considering fees, having no exit strategy, and falling for scams. Understanding these common mistakes and not making them helps investors make better, less risky decisions and possibly make more money in the process.

The Bitcoin investor who succeeds in this business needs to undergo continuous education. To tackle the ever-changing volatile crypto landscape better, you need to stay up-to-date on market trends, tech innovations, and security norms. When it comes to cryptocurrency trading, you should remember that responsible investment practices are a must to manage the inherent risks.

For those ready to take the next step, start your Bitcoin journey by learning how to purchase and securely store Bitcoin. Invest wisely, and always invest what you can afford to lose.

The post 8 Common Mistakes Bitcoin Investors Make appeared first on Coinrule.

The post-traumatic stress caused by the great Bear Market of 2018 may be still vivid in crypto investors’ minds.

The fear of buying the top is so intense for many traders that they see every dip around a new all-time high with great prudence. That is not a bad thing per-se. Risk management is one of the main pillars of trading. Taking profits from time to time helps to balance the overall risk of the portfolio, and, in some cases, it makes a lot of sense.

A few weeks ago, we called for a period of uncertainty, and it actually led to a broad market correction. Bitcoin keeps struggling with breaking the $60,000 level, and it may take a while before we see a clear breakout. Meanwhile, Altcoins show resilience on each dip, proving that the demand is still there, in addition to Ethereum.

Binance calculates a DeFi index using ten large-cap coins, and its chart looks undoubtedly bullish . The index is consolidating above an inverse head & shoulder right below the all-time high. As long as the red horizontal level holds, the chances are that the market experiences a new strong leg up at any time. From the macro point of view, the crypto market looks as solid as it ever has been.

In 2017, the only blockchain with real use was Ethereum. And it was used mainly to pour money into ICOs with no working products. Today, everything is different as billions worth of transactions daily provide real utility for those using decentralized protocols. Liquidity providers, oracles, exchanges, lending, NFTs can still add fuel to this Bull Market.

The post This Time Is Different appeared first on Coinrule.

Trading is challenging! It requires understanding the market, planning the right strategy, and cold blood to execute it. Markets are open 24/7, and opportunities, just like risks, can come at any time. Sticking to a plan, no matter what the market throws at you is hard.

Coinrule lets you automate your investments across multiple platforms to protect your funds and catch the next great market opportunity without having to learn a single line of code. A unique tool for all non-professional traders , hobbyist investors, aspiring traders and ‘normal’ people looking to manage their savings.

2020 has been a phenomenal year for Coinrule. The team has more than doubled the user base, grown their headcount, and have now more than ten thousand trades running on the platform every single month. 

We have spoken with literally hundreds of you, every single day of the year. It is the feedback, support, and passion from Coinrule’s community which has enabled this amazing growth.

Now Opening The Doors

Democratizing access to investment opportunities through automated trading is our mission – power back to the people, not the Hedge Funds. For a company like Coinrule, it was never a doubt that taking our community on-board is the way to go. Crowdfunding gives our users, normal people and fintech enthusiasts the opportunity to support a business they believe in and in return benefit from the company’s success. 

Coinrule is now going live with a Seedrs crowdfunding campaign, join our exciting journey (Please remember that when investing your capital is at risk).

By joining the campaign now you can also gain access to exclusive rewards and perks, from free access to Coinrule’s advanced plans to the opportunity to directly shape our roadmap. 

What The Future Holds

2020 was just the beginning. After launching the most beginner-friendly trading strategies platform, Coinrule is now building an investment ecosystem that revolves around automation. From testing your strategies to following expert investors, finding arbitrage opportunities, and automatically getting the best prices across any trading platforms, there is a lot more to come.

To build this vision into reality, your support is needed. By joining Coinrule with as little as £10, you can now get equity and be part of the Future of Finance. And best of all, Coinrule as a SEIS approved venture, allows you to claim up to 50% of the amount invested as Individual Income Tax relief.

What are you waiting for? Make a difference. Learn more about the Future of Finance Today!

Legal Disclaimer:

Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future. Seedrs does not make investment recommendations to you and any investment decision should be made on the basis of the full campaign. No communications from Seedrs, through email or any other medium, should be construed as an investment recommendation. 

This post has been approved as a financial promotion by Seedrs Limited.

Seedrs Limited is authorised and regulated by the Financial Conduct Authority. Seedrs Limited is a limited company, registered in England and Wales (No. 06848016), with registered office at Churchill House, 142-146 Old Street, London EC1V 9BW.

The post Coinrule is Crowdfunding, Live on Seedrs! appeared first on Coinrule.