Things You Should Know Before Investing in Cryptocurrency

[Jasmine]

When people hear that a lot of people became millionaires by investing and trading cryptocurrency, they also want to invest in cryptocurrency and make profits, but what they actually do not know that crypto currency investment is not always profitable.

Here are the things, you need to consider before investing in cryptocurrency

Volatility

Cryptocurrency price is depended on demand and supply, unlike the fiat money, whose value depends on the economic performance of the country, cryptocurrency primarily depends on buying and selling behavior.

For example, if you have bought 1 Bitcoin for $42,000 about a week ago, you would have encountered a huge loss because currently Bitcoin is $36,000. Losing $4000 just in a week is a huge loss. Bitcoin is of course the most popular and the most valuable cryptocurrency, but the price is not stable and the volatility makes it a risky investment.

Rug Pull

Rug Pull is a term used in the cryptocurrency market when the developer of the crypto coin or token or whales (big investor) run away with the investors’ money. Rug Pull frequently happens and the latest one is Squid Game Token. When the developer of Squid Game Token ran away with the investors’ money, the value of token became worthless overnight from over $2000.

 

[Deleted member 28127]

Sometimes your target is to sell Cardano at this price but it is near to the price you target but suddenly falls down and this is the problem of volatility. Some traders are clever so if the price is near to the target they sell or buy and avoid risks and surprises even accomplishing 95 % of earn target is good for them.

 

[Fufi]

Cryptocurrency is one of the most popular types of investment, and it's important for the average person to understand how it works. There are many different ways to invest in cryptocurrencies, including staking, exchange-traded funds, and futures trading. This guide will help you learn about the basics of investing in cryptocurrencies and how to make informed decisions.

 

[btaliat]

Cryptocurrency is not a child play. It involves mature minds to trade successfully with it and earns well with it. There are some factors that need to be considered before a trader starts trading in cryptocurrency.

The risk that it entails should be studied first. Crypto is full of risk especially the future aspect of it. It takes someone that have studied all these to scrape through all the risks that involves in this crypto trading.

The above reason is the main reason why people should not put much money while trading to avoid much loss.