Unless you have had your head under a rock, you are likely at least interested in buying cryptocurrency. But before you can learn how to buy Bitcoin, you should know a few basic things. One of which is how to be safe while buying crypto.
There are five tips in particular that can help even those unfamiliar with the concept to buy cryptocurrency as safely as possible. Follow these tips and you will be able to add this growing prospect to your portfolio.
1. Be Realistic
While the rise of cryptocurrency such as bitcoin has been meteoric, having a good sense helps. If someone you know comes to you and says that they can guarantee a good return, don’t fall into the trap. Cryptocurrency is one of the most volatile investments there is.
Just take a look at the history of bitcoin. The rises and falls have been akin to riding a roller coaster. Because of that, you can safely assume that no one can predict when and how to buy Bitcoin. They are simply guessing like the rest of us. Don’t fall into that trap because it can really cost you at the end of the day.
2. Use Common Sense with Security
There is one thing to keep in mind about success in investing and that is the simple fact that criminals will follow. Hackers are a big problem in this day and age, criminals looking to take a short cut instead of investing their own time and money.
So, it should go without saying that you should use common sense when it comes to your seed phrase or password. The security of cryptocurrency can be pretty comprehensive. That means seed phrases, passwords, and two-factor authentication. Don’t work against yourself by giving any of that information away. Unless it is a spouse, there is never a good reason to give that information to anyone else.
3. Don’t Go All in
We have heard more than a few cases of success stories when it comes to investing in cryptocurrency. An investor who took all that they had, put it in bitcoin, and saw a meteoric rise. But those stories are one in a million.
It can be tempting to dump all that you have into the latest and greatest coin. But avoid that temptation. You can invest in it to be certain but that doesn’t mean putting all your eggs in one basket. The volatility of cryptocurrency also makes it more than realistic to lose all that you have.
Take time to balance your cryptocurrency portfolio. Give yourself protection in the event that one investment falls through. It won’t feel good taking that loss but at least you won’t be totally broke. That has happened to more than a few investors over the life of crypto.
4. Know What Wallet You Need
There are a few different ways to store your cryptocurrency investments as you make them. You can have a hot wallet, which remains connected to the Internet at all times. That carries security risks with it, though, as there is always the potential for a hacker to get through.
That is why investing in a cold wallet is potentially a better idea. A cold wallet isn’t connected online and is typically a separate USB drive that you can bring wherever you want. Moreover, it provides the most protection against potential hackers. If you are only dabbling in crypto, a cold wallet isn’t really necessary but if you are putting a good amount in, it can be essential.
5. Reputable Exchanges
Finally, there is the matter of finding trustworthy places to buy, sell, and trade your crypto. There are plenty of exchanges out there, but you should only be considering the most reputable when it comes to your investments.
Finding a reputable exchange means having the security measures in place to prevent attacks. It means offering secure options for storage as well. Moreover, it provides a sense of reassurance when it comes to your money. At the end of the day, these are your investments. You don’t want some stranger to have access to them because you used a shady exchange.