4 signs you might not be cut out for crypto investing
Cryptocurrency can be a risky investment no matter how you slice it. Therefore, the decision to invest money in this digital asset is something that investors should consider carefully.
Of course, it is possible to make a profit with cryptos, but not everyone is suitable to hold them. Hence the question. Are you suitable for investing in cryptocurrencies, or is it better to choose other investments?
To help you decide, here are four signs that you might not be cut out for investing in cryptocurrency.
1. Looking to make money fast
Buying cryptocurrencies that are on a bull run and immediately selling them is not exactly a great plan, as your chances of losing with this strategy are quite high.
Short-term trading could put you in a difficult situation because it is difficult to be precise when you make a purchase, and you will not always be aware that an asset is rising until its price is already equal. or near. at its highest.
Investors with long-term investment horizons often do better than short-term investors in the markets because they don’t have to worry about the timing of their purchases.
Therefore, if you don’t plan to hold onto your crypto investments for very long, you’re probably better off finding other investment options.
Low risk tolerance
It is worth thinking twice about investing in cryptocurrencies if you prefer to focus on capital preservation rather than growth, and you may sell at the first sign of weakness in your cryptocurrency holdings. crypto.
If you’re a risk-averse investor, you can panic sell at ideal times, leaving you with losses that you could have recouped had you stayed invested during that brief price drop. This is exactly why investors with low risk tolerance need to keep volatile assets like cryptocurrencies out of their portfolios.
Crypto picks are influenced by celebrities or social media
Your crypto purchases shouldn’t be based entirely on celebrity endorsements or social media posts, because if that’s the case, you could be making a costly mistake.
It is quite difficult to always believe the advice you hear or read from social media influencers or finfluencers, as not all of them are qualified experts in the financial field.
Additionally, some might only recommend a particular cryptocurrency for promotional purposes or for their own personal gain. Even those with good reason may not have the same investment goals as you.
So unless you know how to properly screen cryptocurrencies to analyze their long-term potential and risks, investing in cryptos may not yet be a wise decision to make.
The portfolio needs more conventional assets
It is best to invest in cryptocurrencies only if you can afford to lose them and all your finances are in order.
Cryptocurrencies can be very risky due to their highly volatile and speculative nature. Therefore, before including cryptos in your investment portfolio, it is best to fill it with more conventional assets like stocks and bonds.
This way you have assets that will keep you on a stable footing during uncertain times and provide you with decent returns, helping you build wealth in the long run, even if your
does not work well.